Gold futures in the June contract settled last Friday in New York at 1,275 an ounce while currently trading at 1,283 up about $8 for the trading week bouncing off of major support which stands at the 1,267 level. I'm sitting on the sidelines as my only recommendation in the precious metals is a short copper play as gold prices look interesting and I think if the 1,267 level is broken a bear market will develop, so that is the key price level to keep an eye on. Gold prices are still trading below their 20 and 100-day moving average as the trend is to the downside, and if you take a look at the daily chart, the downtrend line remains intact as the bullish trend would not develop until prices break the 1,304 level in my opinion so play this to the downside. Silver prices continue their bearish trend as that is also putting pressure on gold, but one of the main influences on gold is the fact that the U.S dollar hit a two year high in yesterday's trade and that looks to move even higher in my opinion. The chart structure in gold will start to improve in next weeks trade therefor the risk/reward will become in your favor as I do think there are a lot of sell stops at the 1,267 level.
CHART STRUCTURE: IMPROVING
Silver futures in the July contract is currently trading lower by 6 cents at 14.55 an ounce after settling last Friday in New York at 14.37 up about $0.17 for the trading week but remains in a bearish trend. I'm not involved in silver but it still looks like weaker prices are ahead, and if you are short a futures contract I would place the stop loss above the 10- day high which stands at 14.86 as an exit strategy as the chart structure is outstanding due to the fact of low volatility. If you take a look at the daily chart, the downtrend line remains intact, but for the bearish momentum to continue the May 21st low of 14.35 has to be broken and if that does occur I think you could test the upper 13 level as weak demand continues. The U.S dollar hit a 2-year high this week, and that is also putting pressure on silver, however, inflation is minimal at this particular time as industrial metals continue to remain weak as deflation could be a problem as inflation certainly is not as I see no reason to be a buyer of silver at this time. Silver prices are trading under their 20 and 100-day moving average telling you that the trend is to the downside as the entire precious metal sector remains bearish.
CHART STRUCTURE: EXCELLENT
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