Gold stages the highest weekly closing price on record at $1900.30 an ounce
History was made today when gold pricing closed near the highest daily level since August 22, 2011. In fact, as of 5:50 PM EDT gold futures basis the most active August contract is currently settling at approximately $1900.30. On a weekly chart gold closed at a new record price for the highest weekly close.
Considering that this massive rally began in the middle of March in response to a epidemic becoming a global pandemic with gold trading at approximately $1450 per ounce. In this short time span of four months traders have witnessed gold prices rise dramatically from the mid-March lows to close today within pennies of $1900.
The global pandemic has touched every country in the world. According to John Hopkins University the total number of reported cases worldwide is now at 15,628,936, resulting in the loss of 636,262 lives.
According to the CDC, in the U.S. alone 72,219 new cases of the Covid-19 virus were reported from the previous day, taking the total number of infected individuals in the United States beyond 4 million (4,024,492) individuals. Bring the total lives lost in the United States to 143,868 with 1,113 new deaths being reported today.
Our issues with China did not start with the Covid-19 virus which is believed to have begun in a Wuhan province. Prior to the pandemic our two superpowers were fully immersed in a trade war. The rally which began in March of this year came after the trade tensions between the United States and China had already run up the price of gold.
At the end of 2019 gold was trading somewhere around $1300 an ounce after climbing from about $1040 when the multiyear correction concluded at the end of 2015. Roughly 2 years later America and China would begin trade negotiations which resulted in a trade war.
According to Reuters, it was September 24, 2018 when the 10% tariffs on the $200 billion worth of Chinese imports was actualized and enforced, and on the very first day of 2019 China responded by taxing $60 billion of U.S. goods. Unknowingly this issue would be put on the back burners as the world’s greatest superpowers were unable to move past a phase-1 agreement, which at this point is still unresolved.
The current focus in the United States and globally is on mitigating the damage caused by the coronavirus. This has been a huge component creating bullish market sentiment for gold. The recent tensions between our two superpowers have escalated the conflict and was the final push needed to take gold to $1900.
Whenever this pandemic begins to subside countries globally will have to deal with the economic fallout that most certainly will follow. If the economic fallout is combined with heightened tensions between the United States and China collectively these fundamental issues could take gold to $2000 or higher.
Wishing you as always good trading and good health,
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Gold Forecast: Proper Action
On July 7th, we issued the following Trade Alert; BREAKOUT and Close ABOVE $1800. Buy August gold @ the market – Current $1807 to $1808.10. Place Protective Stop @ $1762 just below the low of the last three days.
On July 22 gold moved higher and filled our limit orders:
August Futures: long gold @ $1807 and sold @ $1860 for a profit of $5300.00 per contract.
Forex or Spot: long gold @ $1790 and sold @ $1850 for a profit of $6000 per 100 ounces.
ETF's: Maintain long ETF positions:
As of Friday July 24, 2020
NUGT in @ $73.00 - Current $ 101.11
GLD in @ $167.00 - Current $179.16
SLV in @ $18.00 - Current $21.36
Long July Silver at 27.65., stop hit at 27.49, for a loss of $0.16 per oz
Long XAGUSD at 27.58, stop hit at 27.49 for a loss of $0.09 per oz
We took our stop to the market as strong selling dominated trading.
Long June Gold (GC M21) at 1810. Out at $1816 for a profit of $590.00 per contract.
Forex: Long XAUUSD at 1810.20, out at $1811
Long June Gold (GC M21) at 1744.00. Out at 1760, for a profit of $1600.00 per comex contract
FOREX: Long XAUUSD at 1743.21. Out at 1759, for a profit of $15.79 per ounce
Our stop on SLV was hit @ 23.97, resulting in a profit of 0.72 per share. We went long SLV at 23.25.
Forex Silver: In @ 25.15. Out @ 25.87 for a profit of $0.79 per troy ounce
May Silver: In @ 25.21. Out @ 26.20 for a profit of $4450 per Comex contract
GLD: On April 12th our stop was hit at $162. We went long at 162.82. Trade resulted in 0.82 loss per share.
Futures: Gold (GC J21) in at 1722.80. Out at at $1728 for a profit of $520.00- per Comex contract.
Forex: XAUUSD in at 1724.40. Out at at $1729 for a profit of $4.60- per ounce.
ETF's: GLD in at 161.55. Out at at $161.90 for a profit of $0.35- per share
SLV in at $24.24. Stop hit at $23.50, for a loss of $1.05 per share
May 2021 (SI K21) in at $26.26. Stop hit at $25.3 for a loss of $0.96 ounce
Forex silver in at $26.17. Stop hit at $25,30 or a loss of $0.87 per ounce
On February 18 we entered a long April Platinum trade. In at $1282. Our stop was hit today (02/26/21) @ at $1217.00
SILVER FUTURES MARCH: Entry at $27.36, and then closed the trade later @ $27.45.
XAGUSD: Entry at $27.26,, our stop was hit at $27.39
We closed our positions in SLV:
First leg SLV: @ 22.95 .out at @ $24.99
Second leg SLV @ 24.60. out at @ $24.99
On Thursday February 4 stops were hit on our long GLD ETF. We entered at 172.14. Our stop was hit at $168.29 (the open on Thursday) for a $3.85 loss per share.
GOLD FUTURES APRIL: Entry at 1845 - 1859 . Stop hit at 1813 - average loss $3900 per contract
XAUSUD: Entry at 1845 - 1857 . Stop hit at 1813 - average loss of $38 per oz
SILVER FUTURES MARCH: Entry at 25.42 - 25.46 . Stop hit at 24.11 - average loss $6650 per contract
XAGUSD: Entry at 25.33 - 25.40 - Stop hit at 24.11 - average loss $1.3 per oz
long February gold @ $1890.00 and stop hit @ $1902.20, for a profit of $1202.00 per contract
long Forex gold @ $1886.00 and stop hit @ $1898 for a profit of $12.00 per OZ
long March silver @ $26.31 and stop hit @ $26.41 for a profit of $500.00 per contract
long GLD @ $177.26 and stop hit @ $178.00 for a profit of $0.71 per share
long SLV @ $24.67 and stop hit @ 25.00 for a profit of $0.33 per share
long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
Gold Market Forecast
Considering that in less than two weeks ago gold was trading at just under $1800 per ounce, and closed today $0.30 above $1900 per ounce, traders have witnessed one of the greatest price advances in the history of the precious yellow metal. More importantly the fundamental factors at play are continuing to unravel, and continue to remain unresolved. There is the economic fallout that will occur from expenditures by central banks globally that has yet to be felt. There is the tremendous amount of capital which has been allocated by various countries to aid its citizens in their time of hardship. And now add to that a widening of the chasm between the United States and China in regards to their unsettled trade disputes.
This week the United States ordered China to close its Houston consulate citing efforts to steal trade secrets. Videos were taken in which it was clearly visible that members of the consulate were burning large amounts of documents in the back of the building. This by itself is not evidence that the Chinese stole scientific research but it does indicate that something nefarious had been going on.
Collectively these fundamental issues could take gold beyond $2000 per ounce.