Light Pre-Summer Volume Results in Fractional Decline in Gold

May 22, 2019 - 6:59pm

 by Gary Wagner

Not even the Federal Reserve minutes from last month’s meeting seem to have any kind of dramatic affect either bullish or bearish as it relates to current gold pricing. The minutes released today defined a continuation of the current monetary stance which is focusing on staying the course and moving interest rates neither higher, or lower as they stated in recent statements released at the conclusion of the last couple of FOMC meetings.

As reported in Bloomberg, “Federal Reserve officials judged at their latest meeting that their patient approach to interest-rate change would be appropriate “for some time,” and many sided with Chairman Jerome Powell’s view that the recent dip in inflation was probably temporary… Members observed that a patient approach to determining future adjustments to the target range for the federal funds rate would likely remain appropriate for some time,” according to minutes of the Federal Open Market Committee’s April 30-May 1 meeting released Wednesday in Washington.

Today’s minutes from last month’s meeting said that “In light of global economic and financial developments as well as muted inflation pressures, participants generally agreed that a patient approach to determining future adjustments to the target range for the federal funds rate remained appropriate.”

Today U.S. equities had modest declines across the board Bloomberg cited the motivating factor as renewed concern about the trade war “U.S. stocks fell Wednesday as trade tensions simmered, with the White House said to be preparing to blacklist more Chinese technology companies. The dollar and Treasuries held their ground after the release of meeting minutes from the Federal Reserve, which stressed a patient approach to interest-rate changes.”

As of 4:53 PM EDT gold futures basis the most active June contract is currently down by $0.10 on the day and fixed at $1273.10. This $0.10 price loss occurs with a fractionally higher dollar index which is currently up by 0.03% a net gain of .034 points and fixed at 97.93. This indicates that dollar strength although fractional was greater than any gains realized in gold pricing today.

The same can be seen in spot or physical gold today with the KGX (Kitco gold index) fixing the price of a single troy ounce at $1273.10. This can be further broken down into dollar strength which took away at -$1.40, with tepid buying resulting in an increase of $0.30 per ounce resulting in the net change to a loss of -$1.10 on the day.

Wishing you, as always, good trading,

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action
We are currently flat with no active trades.
 
As we spoke about both in our opening letter and video report the identification of a descending triangle is extremely  bearish, and as such we will look to see if prices break below the double bottom at $1267.
Gold Market Forecast

Today's video report will continue to detail why our current sentiment is bearish, with the real possibility of breaking below the double bottom which occurs at $1267 per ounce. According to the definition of a descending triangle a break below $1267 would trigger a sell signal.

Sentiment Indicator:
Gold -> Bearish
Silver -> Neutral
S&P 500 -> Neutral
Bitcoin -> Neutral
Bitcoin fundamentals by Joseph M. Wagner II:

Tether Take Over?

BTC futures continue to consolidate just below current resistance at approximately $8500. Basis the CME futures five-coin contract Bitcoin futures are trading down approximately $200 a little over 2% as of 4:45 PM Eastern daylight Time.

Volume in the CME’S BTC futures contract is finally dropping down to about 8000 contracts on the day, still relatively high on a historical basis, but finally showing some diminished interest in the short-term.

In the cash market the volume of Bitcoin bought and sold in the last 24 hours ($11.82 billion) has been overtaken on the day by Tether whose volume for the last 24 hours is over $15 billion worth of coins being bought and sold. For those unfamiliar with Tether (USDT) which is a so-called “stable coin” because it is directly fixed to the U.S. dollar, therefore its price always will be equal to one U.S. dollar.

Tether being the front runner of all of the stable coins and is the largest digitally exchanged fiat currencies pegged coin. It is also backed 100% by reserves that include fiat currencies and occasionally other assets, and has recently been added onto the Ethereum blockchain rather than only running on Bitcoin’s network, even though it is tethered against the U.S dollar, it runs on the same blockchain meaning if Tether gains volume  the BTC futures contract will benefit