Markets are headline driven nowadays, and we all know that markets do not like uncertainty. The equity markets are in liquidation mode today and the funds are being re-allocated towards the safe haven trades such as the US Treasuries and the precious metal markets. The US Dollar also finds itself under pressure as investors and traders lose confidence in the US markets…at least for now.
The recent bounce in the precious metals began as just a technical correction and now have some fundamental support, from what some may consider “President Trump’s political issues”. Only time will tell if the inability for everyone to unite in Washington will hurt the economy and the markets. If an investigation begins, it is likely to be a long drawn out process before a resolution is reached.
At the time of this article, S&P futures are down 33 points and Dow futures are down 280 points. I would expect a test of the 2330.00 range in the S&P’s, and 20,330 range in the Dow futures. August gold futures are currently $22 higher on the day and have managed a close well above the $1,250 level. I would expect that there is enough news to continue driving gold to test levels between $1,275 to $1,300 with potential to drive prices back to $1,350.