Gold Chart of The Week

Each Week 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 (June 24th through June 28th)

Selling pressure carries over from last week to begin the last five trading days of June. If the FOMC statement weren’t enough for market bears, China added fuel to the fire with alarming overnight news from their banking sector. With a busy week ahead of economic data, coupled with a daily dose of speeches from US FED members, we should have enough news to give the markets some nice volatility to trade.

When Ben Bernanke spoke last week, he was careful in giving the markets enough news without giving away everything. While rates remained again unchanged and the FED decided to maintain their bond buying program, there was mention of a timeline for retreat from quantitative easing. This was just enough news to pressure markets across the board. For the second half of the week, quote boards were a sea of red.

Many futures prices closed the week at predictable support levels, but are now sliding further after China released news that their policy bank was cancelling a scheduled bond auction after it was recognized that funds were not properly allocated. This unfortunate news may have squashed the hopes of an early week support bounce.

But fear not, this week is littered with economic data in the US and more importantly, full of speeches from FED Members who will most certainly provide color and insight into the potential exit timeline of quantitative easing.

As far as the price of Gold is concerned, it should be noted that the relationship of Gold prices to the US Dollar continues to be a non-factor. The relationship of Gold prices to stock indexes also continues to be a non-factor. So what exactly is Gold tied to? I suggest…….nothing at this point!

My thoughts on the price of Gold is this. When Precious Metals like Gold are once again considered a bargain for hedge funds, the Precious Metals will rally, plain and simple. Until then, we will have to listen to the same Summer lullaby that we hear in the Metals year after year. I expect choppy prices in Gold to continue this week and would not be all that excited about scaling in until the market shows technical closes that suggest the buy is back on. Until then, there are plenty of opportunities outside of this commodity that are much more rewarding.

If you have any questions, please feel free to reach out to me directly. I can be reached via email at [email protected] or by phone at (888) 272-6926.

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

** 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.

2 thoughts on “Gold Chart of The Week

  1. The "fear trade" and "flight to safety" are two of the dumbest things said that gold supposedly is. For instance it wasn't ever a flight to safety in last years European crisis, and the election of Obama was supposed to cause it to storm higher as well. It didn't do well at all during 2008-09, neither did it in the 2 weeks just after 9-11. Or in the 1997-98 Asian panics/LTCM liquidations, it fell apart then along with mining stocks. Same in 1987 during that crash.

    It will do well when more figure out that the inflation story is phony, and when the dollar doesn't go anywhere under a massive and unrepayable debt load.

  2. All directly related concerns like china cash crunch, steps taken by Government of India to curb Gold Imports, and overall slump in majority markets will put Gold in a dull or thinner range bound restricted movements.

    However i think all above points are not so much important as a whole, because even any person like Tom Dick and Harry too, are well aware of all that stuffs, now we required to closely watch the actions and reactions of Paper Gold holders, and Gold ETF retail investors, and accordingly, what kind of future possible strategies, adopted by them. So that will play a deciding role for the future market of Gold also everything will be effectively depended on it.

    With a view to all above, for some short span, Gold may trade in narrow range, but meanwhile, if any panic sale scenario will taken place, due to out come of any kind of certain Global Economy related serious issue, in such situation, Very strong probabilities will be there that Gold break its both major Psychological supports of $ 1200, and $ 1000 levels and may touch up to or around lower mark of $ 800. AND THAT WILL TOO, IN A VERY FASTER PACE, SAME LIKE LAST TWO MAJOR FALLS.

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