Gold Technical Overview

gold technical overview

Yesterday, two levels in the price of Gold were violated giving the shorts confidence there is more selling to come. So, let’s do a gold technical overview.

As we traded thru the December 2017 low at $1,236.55 and July 2018 low at $1,236.85, stops on the technical side were triggered. This breakthrough seemed to fuel more selling which then violated the next technical level of support that many Wall Street Gold Traders were watching at $1,232.

Interestingly enough, early in the day we found little movement in the dollar index and in the Ten-Year Treasuries, which recently were the main drivers to lower Gold prices. Later in the morning, the dollar strengthened creating a further sell off in the price of Gold to a new low of $ 1225.90.

Gold prices continue to be pressured this morning after comments made yesterday from Fed Chairman Jay Powell. He said, “We see a strong economy with no inflation worries.” Then said, he expects continued rate hikes, which in turn gave the dollar a boost, hurting the price of Gold.

The continued exit of Gold ETF investors is putting additional pressure on the price of Gold. These steady liquidations in the Gold ETFs have put their holdings at a fresh 2018 low on July 17 at 2,095.20 tons.

Even though the market looks exceptionally weak, there are some bottom pickers around as Comex speculators increased Gold’s net long fund position for the second consecutive week. Looking at the trading activity yesterday, I expect the longs that stepped into the market last week to be “long” gone by now.

Ever since the April 11th high at $1,365, Gold has steadily declined to a 52-week low yesterday at $1,225.90. That’s a decline of over 10 percent prompting some traders to call for a test of the $1,200 dollar level in the weeks to come.

Have a wonderful Wednesday.

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.