Gold and silver levels ahead of the Fed - morning express
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold (April) / Silver (May)
Gold, yesterday's close: Settled at 1729.2, up 9.4
Silver, yesterday's close: Settled at 26.288, up 0.377
Fundamentals: Gold and Silver are holding well given the rebound in Treasuries from Friday's low, but they have failed to truly extend gains. We suspect that each will on a technical basis, but this fundamentally depends on continued weakness in the U.S. Dollar and firming of longer duration Bonds. Regardless of today's action, it will all depend on the Federal Reserve tomorrow at 1:00 pm CT, and a failure to signal the slightest bit of interest in yield curve control would quickly weigh on the metals complex. We do not believe these calls will go completely unanswered and find that supply/demand technicals have exhausted the downside. Still, there needs to be a catalyst to attract buyers. Retail Sales is due at 7:30 am CT and Industrial Production follows at 8:15 am CT.
Technicals: We took a more Bullish Bias yesterday as tailwinds carried from Friday, but the failure to extend gains decisively through major three-star resistances at 1727.5-1732.9 for Gold and 25.97-26.23 for Silver have encouraged us to dial such back to being more cautious once again. In the S&P section, we noted the improving technical landscape for the 30-year Bond and a continued rebound here will certainly help carry the metals. For both Gold and Silver, our momentum indicators have fully caught up with those major three-star resistances and this means they must perform or face waves of selling. How timely, as the Fed policy announcement is due after settlement tomorrow. If you would like to be up to date on the developments of our specific strategies in the futures and commodities markets, please register for a Free two-week trial by clicking on the link here: The Blue Line Express Two-Week Free Trial Sign up.
Resistance: 1727.5-1732.9***, 1744**, 1757.4-1761****
Support: 1719.8-1721**, 1705.6**, 1698**, 1688-1690**, 1671-1680***
Resistance: 25.97-26.23***, 26.54-26.67**, 27.08-27.34***
Support: 25.85**, 25.40-24.51**, 24.77-25.00***