Selling Pressure Continues Across the Board in Precious Metals

April 15, 2019 - 6:24pm

 by Gary Wagner

Gold futures continue to trade under pressure, with the most active June contract closing down by $4.40 (-0.35%), and currently fixed at $1290.70. Although pricing recovered from the intraday low today which was $1285.30, any quick recovery from last Thursday’s price meltdown seems to be at check, at least for now.

Today’s decline occurs in combination with a fractionally weaker U.S. dollar, revealing that it was 100% selling pressure that has taken gold prices lower. Currently the U.S. dollar is trading off by -0.05% (-0.053 points) and fixed at 96.545.

All of the precious metals are trading under pressure today with the greatest percentage drawdown occurring in palladium futures. Currently palladium futures are down $15.60, and fixed at $1334.60 which is a net decline of -1.16%.

Although the entire complex has been under pressure recently gold, platinum and palladium are all trading above their 100-day, and 200-day moving averages. In fact, the only precious metal to have its pricing below all three key moving averages (50 ,100 and 200) is silver. Last Thursday’s strong selloff took all of the precious metals lower, but only silver pricing broke below the long-term 200-day moving average.

U.S. equities joined the precious metals in that they have all closed lower on the day. U.S. equities were all fractionally lower across the board with the NASDAQ composite having the greatest percentage drawdown today giving up -.011%. The Dow Jones was not far behind with losses today amounting to -0.10%. Lastly the S&P 500 showed small losses and declined by -0.06%. Although equities across the board were lower, all of the losses were fractional, and a case can be made that they closed in essence unchanged on the day.

Many analysts including Jim Wyckoff of Kitco news have acknowledged that the lack of geopolitical turmoil has been an underlying factor moving the precious metals complex lower earlier today Wyckoff stated, “The safe-haven metals continue to suffer from a lack of turbulence on the geopolitical front that would provide some demand for them.”

On a technical basis gold pricing broke below the 100-day moving average in intraday trading today, reaching an intraday low of $1285.30.  Gold pricing has moved off of the low, however as of 5:00 PM Eastern standard time is trading just one dollar above the 100-day MA, which is currently at $1290.80. While this indicates some support at this particular price point, today’s decline is definitely a continuation of the selloff which began on Thursday.

The fact that gold was able to recover and close above that key level does not undo the technical damage seen in today’s pricing. The Truth of the matter is that since Thursday’s selloff gold has traded to a lower high and lower low on both Friday as well as today.

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 in gold or silver.
On Monday, April 8th,  we sent out a trade alert.
Trade Alert: Buy June gold at the market (current 1301.50 - $1301 80). Place Stop at $1287.13.
Today our stop was hit @ $1287,13  for a loss of $1452 per contract
Gold Market Forecast

My assumption on Friday was that Thursdays dramatic selloff might in fact be a one and done, and that gold could easily find support at current pricing.

However that assumption was proved wrong today when the market traded to a lower low of $1285 per troy ounce. That being said, gold did managed to close above its 100 day moving average. Which indicates that it could still find some potential support in this current price region, however the lower low indicates the potential for lower pricing.

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