Hawaii Six O - Gary Wagner
Gold closes higher and is now closer to challenging $1800
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Our technical studies have indicated that it’s not if but when gold will effectively trade and close above $1800 per ounce. This week gold closed at its highest trading value this year, but more impressively it reached a high not seen for the last 7 ½ years.
On Wednesday gold futures, basis the most active August contract traded to $1796.10 and then closed negative on the day. Yesterday gold futures traded lower but closed above a key level of support at $1766. Today we witnessed gold futures have an exaggerated price range from the intraday low of $1754 before closing positive on the day.
As of 5:25 PM EDT August futures are currently fixed at $1784.10, which is a net gain of $14.20 (+0.80%) on the day after reaching the intraday high of $1788.20. Considering that gold opened on Monday at approximately $1764 gold gained $20 on the week. This is the highest weekly close on record since 2012.
Earlier this week dollar strength had offset any real upside move in gold. Today the dollar was in essence unchanged and gains witnessed in the precious metals are 100% due to traders bidding all of the precious metals higher.
This week market sentiment can be characterized as a risk-off environment favoring safe haven assets as U.S. equities traded dramatically lower. The Dow Jones Industrial Average lost 730 points in trading today and closed at 25,015.55 points. The net decline on the week was almost a thousand points. In trading today, the S&P 500 lost approximately 2 ½%, and the NASDAQ composite lost 2.61%.
Covid–19 infections continue to rise at an alarming pace
It was the rise of infections from the coronavirus in the United States and globally that elevated concern that the pandemic could force many countries including United States to roll back the reopening’s. Today alone the CDC reported that there were an additional 37,667 new cases reported in the United States.
This brings the total of cases in the U.S. to 2,374,282, with the loss of 692 souls today taking the total death reported to 121,809. A number of states including Arizona, New York, Texas and Florida have had the largest number of new cases reported, with Florida having reported 8,942 new cases today.
According to NPR.org the U.S. set a new daily record for new coronavirus cases. “With numbers spiking across Southern states, the United States set a daily record for new COVID-19 cases Thursday. According to data collected by Johns Hopkins University & Medicine Coronavirus Resource Center, 39,972 new cases were recorded June 25, surpassing the previous record set April 24, which saw 36,291 new cases. The
U.S. continues to lead the world in both reported cases and deaths from the coronavirus. As of early June 26, the U.S. has recorded 2,422,310 cases and 124,416 deaths.”
As we have spoken about all week; not since the financial crisis of 2008 have we witnessed the kind of economic upheaval that is currently plaguing countries worldwide, and not since the financial crisis of 2008 have we seen gold pricing gain value at such a rapid pace.
It seems highly likely that until the pandemic has run its course and the global economy returns to pre-pandemic numbers, that we will continue to see gold prices at this level or higher.
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Wishing you as always, good trading,