Gold Retreats After Failing to Overcome Critical Level

April 29, 2019 - 6:14pm

 by Gary Wagner

Losses across the board in the precious metals today. There was a wide range in the amount lost individual were as gold gave up 0.5% palladium lost a whopping 6% where gold and platinum have given up some of the gains achieved on Friday and palladium and silver giving up more than Friday’s gains.

The largest percentage drawdown today occurred in palladium which had over a $100 trading range. Palladium opened two dollars off of its high at $1457.20 before plummeting and losing 6% in trading today. Palladium futures are currently down $86.80 and fixed at $1360.40.

Although silver only lost .93%, today’s $0.14 decline took the futures contract below $15 again and currently is fixed at $14.85.

Solid economic data out of China as well as mildly stronger U.S. equities were responsible for today’s declines in the precious metals. According to MarketWatch, “Monday data showing that profits at Chinese industrial firms grew for the first time in four months set a relatively upbeat tone for riskier global stock markets, nicking precious metals prices. Some strength in the U.S. stock market also helped to dull investor interest in gold.”

A weaker U.S dollar provided tailwinds for the precious metals complex. The U.S dollar index closed just under 97.70 the current level of major resistance. After factoring in today’s decline of 0.16% the dollar is currently fixed at 97.57.

This Wednesday, May 1st the Federal Reserve will meet for the next Federal open market committee meeting (FOMC). However, it is widely believed that the Fed will continue their dovish stance and leave interest rates where they are.

Gold prices retreated by a little over 0.5% today, an after factoring in today’s decline of $7.40 June futures are currently fixed at $1281.40.

Our technical studies indicate that currently there is strong support for gold pricing at $1267 per ounce. This is a Fibonacci retracement-based support level. Resistance remains intact at $1291.30 per ounce, which is the .38% retracement level, and at $1293.60 the current 100-day moving average.

The failure for gold prices to move higher off of Friday’s gains indicate a continuation of a compressed trading range, with the price difference between support and resistance continuing to narrow.

Wishing you, as always, good trading,

Gary S. Wagner - Executive Producer

Members section is now available for free, because 14 days has past since its publication.

Gold Forecast: Proper Action

We are currently flat with no active trades in gold or silver. Although price action on Friday indicated a high probability that gold pricing had formed a base and price support. This strong upside move indicated a pivot or key reversal in market sentiment from bullish to bearish, however that was short lived with today's decline of over $7.00.

Gold Market Forecast

With today's decline of the precious metals across the board it certainly dampens the bullish market sentiment seen on Friday. That being said we could still see the precious metals return to their bullish demeanor, with gold having the highest probability of that occurrence. However until we see a return to positive gains on the day we could trade sideways as we get closer and closer to the beginning of May's FOMC meeting which will begin on Wednesday.

Sentiment Indicator:
Gold -> Neutral
Silver -> Bearish
S&P 500 -> Neutral
Bitcoin -> Bullish