Yesterday, a much stronger than expected US Durable Goods number (4.5 percent vs. expectations of a 2 percent number) rallied the dollar and put pressure on the price of Gold.
Technical support levels were violated at the $1,188 level, and now many traders are expecting a retesting of our most recent low of $1,160 that was hit just a few weeks ago.
The question remains, are there any more speculators willing to add to their current short positions and try and bring the price of Gold to new lows?
If you look at last week’s Commitment of Traders (COT) report you will see that the street is already extremely short. We will be watching closely this afternoon to see what the new COT report shows.
It’s my opinion that the street doesn’t have the appetite to add more shorts to their books at this time. Higher interest rate news is already baked into the markets and if there is any news that effects the price of Gold I expect it to rally the Gold market not bring it down. In other words, the Gold market is saturated with negative news and has no more room to absorb another drop.
The price of Palladium is headed in a different direction from the other three metals. A growing tightness of supply is attracting hedge funds to take on some risk. The most recent Johnson Matthey report indicated they expect a short fall in supply this year of over 240,000 ounces, where in contrast Platinum supplies are expected to be in excess.
A continue short supply should help the price maintain these levels, if not trade a little higher with the next resistance level at $1,000 dollars, followed next by possibly testing the 2018 high at $1,120.50 per ounce.
Have a wonderful Friday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.