Weekly Gold Report (October 14th through October 18th)
What can be said about the week that lies ahead? More of the same sounds about right. After Democrats and Republicans spent another full calendar week bickering and positioning, we seem to be no closer to a deal than we were in the prior week, and the threat of a default on debt continues to loom.
So as we inch closer to the final deadline (October 17th), we should expect to hear from Government officials along with members of the US Federal Reserve, all of whom can say the right OR wrong words for the day and have an impact on the direction of a market. There have been a few reports cancelled because of the Government Shutdown and we expect a few to be cancelled again this week leading up to the 17th. And the reports that are released (including a few from China in the middle of the week), will likely take a back seat to any progress OR lack thereof made in Washington.
The daily chart of the December Gold Futures shows a continued slide in prices. Last week’s price action was weak and even included a sharp drop below the October 2nd low print. Sell-stop orders were triggered after a large sell order was filled near the open on Friday. This drove Gold sharply lower and even halted trading for a short period of time. Since then, the price of December Gold has held within the prior days trading range, but remains questionable in either direction.
I remain neutral on Gold this week because of the potential for a very volatile week. With the release of data in China coupled with the US debt ceiling debates, I think this week leaves Gold vulnerable to similar moves like the one we saw on Friday. Until Gold shows me a few closes above the resistance trendline that has kept a lid on upward action (arrow #1), I will remain on the sidelines and enjoy the show.
If you would like to discuss trading in the Futures and Futures Options markets with me, please feel free to call or email me directly. You can reach me directly at (888) 272-6926 or by email at email@example.com.
Thank you for your interest,
Senior Market Strategist
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