While it is not the best of time for some, it is the worst of times for many | The Gold Forecast

While it is not the best of time for some, it is the worst of times for many

July 27, 2020 - 5:42pm

 by Gary Wagner

While it may not be the best of times for the upper working class of America, it is certainly not the worst of times as it is for the millions of Americans that are out of work. Those living paycheck to paycheck who have jobs, and for those who have lost their jobs and are facing the end of this current round of aid from the “Care Act” at the end of this week, life is extremely difficult at best.

This is not to say that the that those financially well-off Americans who have invested in U.S. equities are not watching their portfolios grow. But it is also not to say that those most affected by the economic shutdown as a net result of the pandemic are not dealing with a tremendous level of stress wondering how they will make next month’s rent or mortgage payment, let alone feed their families.

Without the Congress and Senate allotting additional aid for those truly in need, the beginning of next month will be filled with uncertainty and despair. It is for that reason that the powers that be in both the House and Senate must act in some bipartisan manner to aid those facing evictions or foreclosures.

That being said the additional expenditures will result in billions if not trillions in additional aid which will greatly increase the already swelling budget deficit. The additional expenditures will raise the national debt level to one of the greatest levels in history, and as such continue to devalue the dollar.

A lower U.S. dollar and continued action by the Federal Reserve will most certainly provide tailwinds which will take the safe haven asset class higher, specifically gold and silver.

Today gold traded to a new all-time record high against the U.S. dollar. Gold has been at all-time record highs when paired against other major currencies such as the Euro dollar. Based upon the current economic contraction brought about by the pandemic, it seems that it is likely that gold and silver prices will continue to rise. That is not to say that there won’t be corrections along the way, however the path to $2000 an ounce gold seems to be etched in stone at this point.

As of 4:09 PM EDT spot or physical gold is currently trading up $37 plus, and fixed at approximately $1938 per ounce. The next contract month become the most active gold futures contract is the October 2020 contract which is currently fixed at $1944, up $33.90 on the day. Silver basis the most active September contract is up by 7.44%, or a $1.70 per ounce and fixed at $24.55.

Even as U.S. equities continue to rise investors are becoming more and more focused upon the fact that the coronavirus pandemic is still affecting hundreds of thousands of individuals worldwide. This pandemic if left unchecked could at some point threatened to raise the potential for another series of lockdowns further contracting the economy.

This potential for further lockdowns if realized could certainly have a profound and negative influence on U.S. equities, and make the safe haven asset class even more attractive than it is now.

Wishing you as always good trading and good health,

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

Yesterday, July 26 we sent out this -Trade Alert: Buy October Gold @ the market. Buy GC V20 (October gold) at the market – current $1924.30 . Place stop at $1870

Forex @ $1915 Buy @ market stop @ $1860

Maintain long GLD SLV NUGT

Maintain long gold  (Futures and Forex) Maintain stops.

Closed trades:

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

Futures: 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

Since mid-March of this year we have seen gold prices rise dramatically from approximately $1450 to its current pricing well above $1900 per ounce. At the end of this month the aid that was given to those individuals who have lost their livelihood will run out. Without additional aid that needs to be passed by the House and Senate these individuals will be caught between a rock and a hard place. Many will face eviction, some may even face foreclosure if no aid is passed over the next few months.

This of course means that there will be additional expenditures by the government to help these individuals in need. That coupled with the current monetary policy of the Federal Reserve will take an already historically high debt level in the United States even higher. As such we could easily see gold move to $2000 and above.

Market Overview

Economic Calendar