Volatility persists ahead of rate hike
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Gold is finding resistance between $1,915 and $1,920 as of this writing. Should the metal realize a close over $1,925 with conviction today, that would be evidence that the bottom was in at $1,875 and the chance at $1,850 will not materialize.
Silver also seems to be making a bottom at $23. The daily silver chart below shows momentum trying to turn up from the support range; traders have an opportunity to take a long position for a move to the top trendline (or higher) with stops below the bottom trendline.
Platinum has, in fact, rallied from $915 and the move to $965 looks underway, with resistance at $935 first. Although the overnight action in metals is encouraging for bulls, traders should continue to expect volatility.
The negative U.S. GDP print released yesterday concretely puts the Federal Reserve in a very tough position (as has been widely anticipated in the hard money community) now that the U.S. economic contraction is official. This should fuel participants' confidence that the central bank's hawkish tone is about to start fading out, setting the stage for what could be a huge relief rally in all asset classes next week post-hike, on at least a temporary reversal of what has been extreme USD strength.
Thanks and have a nice weekend,