Gold Chart of The Week

Each Week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (May 13^th through May 17^th)

Outside of a late week Currencies surge, there were very few fireworks to report in last week’s business. This week however, may be a different story.

Thursday and Friday of last week provided some decent movement in the Dollar and Euro, but it appeared things began in the Japanese Yen, then spilled over. Throughout the last several weeks, there have been multiple attempts to push the Yen to new lows for the year, but it always seemed that somehow the plan was foiled. After the selling pressure triggered stop-orders below support, all other Currencies had to react. There was a firm rebound in the US Dollar and an inverse move in the Euro Currency. Surprisingly, the swings in the Currencies had very little impact on outside markets. In fact, most other sectors of the markets were rather stale and choppy. A Treasury Bond auction had some impact on the 30yr bonds and 10yr Notes, but there was little else in the week that provided any excitement. The same goes for the Gold Futures. Normally, traders would use the direction the Dollar or the Stock Indexes as a guide for what to expect in the Metals, but those former relationships are no longer in play on a day to day basis.

This week, there are a few decent reports in the US and Europe that should provide some decent movement. In the United States, Retail Sales, CPI, PPI, Empire State Manufacturing, and Philly Fed reports will be worth watching. In Europe, traders will be following economic data out of Germany along with European GDP figures to provide sustained market direction in at least the Currency sector, but I am unsure whether or not it will carry over into the Metals.

The Weekly Chart of June Gold shows the Futures prices consolidating around $1425. I still believe that Gold Futures may have some further pressure ahead while the US stock indexes remain stable and strong. One thing that will be interesting to watch would be if the Gold Futures ever return to being a “flight to safety” vehicle if the stock market corrects. I will keep a tight watch on that former relationship as the stock market continues its questionable rally into uncharted territory.

Thank you for your interest,
Brian Booth
Senior Market Strategist
[email protected]
888.272.6926

** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.