Gold futures in the December contract settled last Friday in New York at 1,512 an ounce while currently trading at 1,483 down nearly $30 for the trading week as prices look to head lower in my opinion as I see no reason to own gold at this time.
The U.S. stock market is up nearly 500 points today as a possible Chinese trade agreement could be at hand later this afternoon. If the market likes that situation, gold prices could drop significantly, in my opinion. Gold prices are trading under their 20-day but still above their 100-day moving average, however, if you look at the daily chart, the downtrend line remains intact as I think the only precious metal that will continue to rally is palladium.
The next major level of support is around the 1,450 level, and I think that will be touched possibly in next week's trade. The money will start to come out of the precious metals due to the trade agreement and then will begin to enter into the U.S. equity market. However, at the current time, I am not involved. Still, I do have a bearish bias to the downside.
Volatility in gold will remain high as if you have to remember part of the rally that we witnessed over the last several months was due to the Chinese problem and if that situation is eradicated, there's no reason to be involved in gold.
CHART STRUCTURE: IMPROVING
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