RJO FuturesCast

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Metals

Gold’s Bear Camp Regains Minor Traction to Start the Day

Posted 07/25/2017 9:12AM CT | Manon Lasserre

While the gold market forged another new high for the move to start out the trading week, it was unable to hold onto all those gains and it has started out Tuesday’s trade on a back foot, which could prompt some traders to speculate on a near term top. However, the gold market did manage some gains yesterday in the face of a strong dollar and that suggests residual capacity by the bull camp. Unfortunately for the bull camp, open interest and volume have fallen off on the last three days action and it would appear as if the overall political anxiety influence on prices from the US has downshifted temporarily. An issue that might undermine the gold trade today is news that the Russian Gold Miner Polymetal achieved a 7% production gain in the first half of 2017! While August gold has remained above its 50-day moving average, that critical pivot point today comes in at $1,251.20, and the failure to hold that level could put the market into at least a short term corrective mode. From the July low to the high forged yesterday, August gold rallied $55.00 an ounce and that should leave the market short-term technically overbought. Similarly, the September silver contract remains well below its 50-day moving average up at $16.71, and it is showing some early chart damage in a fashion that could signal a correction ahead.

Market Ideas: December gold is short term bullish and holds a bull target to 126940 for resistance. We may see minor corrective dips and congestion as trade consolidated recent gains, but stabilizing over 124560 will build a bull flag to launch a run at 126940. A close under 124560 marks a short-term reversing turnover. 

 

Dec ’17 Gold Daily Chart

Dec '17 Gold Daily Chart

Manon Lasserre