Palladium and Gold Futures Inch Closer to Parity

January 8, 2019 - 5:20pm

 by Gary Wagner

Gold futures had a modest retreat today, and as of 4:25 PM Eastern standard time is trading down by $4.40 and currently fixed at $1285.50. At the same time we have seen palladium pricing, which has been breaking its record high almost on a weekly basis trading up $26 today and currently bid at $1266.20. That puts the differential between gold and palladium futures at under $20 per ounce.

In fact, palladium in the cash market has not only gone to parity with gold but is in fact more expensive than the precious yellow metal. In terms of cash pricing palladium today is the most valuable precious metal of the complex which contains gold, silver, platinum and palladium.

According to the KGX, (Kitco Gold Index) spot or cash gold was fixed at $1284.10 today, and spot or cash palladium was fixed at $1309. While both gold and palladium lost $3.20 per ounce as a result of dollar strength, normal trading resulted in a one dollar decline in gold pricing and a $25.20 increase in palladium.

Gold, silver and platinum all had modest declines today. Although there was extremely mild selling pressure in gold, there was also the addition of dollar strength accounts for the majority of today’s declines in all three precious metals.

Market participants continue to focus upon the current trade war between the United States and China. Currently the perception is at talks which are currently taking place in Beijing are moving closer to a resolution and the trade dispute has bolstered not only US equities but global equities as well.

US stocks are currently back in full bullish demeanor with the Dow Jones industrial average gaining approximately 1% in trading today. With four minutes left in the trading day the Dow is currently up 252 points and fixed at 23,780. The tech heavy NASDAQ composite is also exhibiting gains of approximately 1% today, and after adding a gain of 70 points on the day is currently fixed at 6892.33. The Standard & Poor’s 500 is trading almost a full percentage point higher on the day and is currently fixed at 2572.18.

As a direct result of a weaker euro dollar and British pound, dollar strength has returned to the marketplace today. The dollar index is currently up almost 3/10 of a percent, a 27 point gain and currently fixed at 95.505.

Our technical studies currently indicate that resistance in gold futures remains at $1300.00 to $1312.00 per ounce. Our studies also indicate solid support for gold futures at $1275.80.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

Sentiment Indicator:

Gold Forecast: Proper Action
Thursday, December 20 we went long Feb gold @ 1268.50 with a stop we raised to @ 1270.13
Maintain long Feb gold and stop* 
*We will raise stop later this week
Gold Market Forecast

Today’s gold price decline is mostly due to a stronger U.S dollar, it indicates a compression of range. We still see resistance at $1300 per ounce, it is likely that we will see yet another attempt to breach that significant psychological level. Above that level we see real resistance at $1312, which is based upon a Fibonacci retracement level.