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Gold approaches resistance at $1,965

Commentaries & Views

As suggested was the probability, gold is approaching the $1,965 level as of this writing. Traders who initiated speculative positions at the bottom of the range around $1,915 may consider taking some profit. Should gold cross over $1,965 with conviction, bulls can look for a move higher to the round number of $2,000 with minor resistance around $1,985 first.

In overnight trading, the gold to silver ratio fell more than 1%, indicating further strength. Silver has broken out of a bullish wedge. The catch-up trade in silver may be on the cusp of manifesting. $25.40 - $25.50 is the resistance level silver bulls have their eye on. Below is a snapshot of the breakout in silver on the daily time frame.

Palladium has continued to move up and looks set to run to Palladium has continued to move up and looks set to run into overhead resistance at $2,650.

U.S. indices are pointing to a lower open this morning and, frankly, look poised for a scary drop toward the bottom of the expanding wedge identified last week. Such a move may mark the bottom of the grind where indices have been stuck. Stocks are holding up despite the continuation of the torrid rise in the U.S. 10-year treasury, now fetching a yield of 2.75%. With Crude oil continuing its move lower (as suggested was the probability with a weekly close under $105), it will be interesting to see if the Fed can or will use the falling price of energy as cover to take the edge off its hawkish tone.

Gold (and maybe stocks) could already be anticipating an interest rate policy reversal…

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