Surprisingly, we start the day seeing the price of Gold under continued pressure. As the price of Gold declined and penetrated the significant spot level of support at $1,318, selling emerged and the selloff accelerated as many Wall Street Gold traders saw this as an opportunity to put on short positions.
One trader said this morning, “Even with the continued aggressive buying by Central Banks the price of Gold could not stay above support levels. And this is all happening with a steadying Dollar Index giving me the impression that there are some underlying factors that are not evident at this time”
Just a short time ago, the price of Gold hit a 10-month high and now some traders we spoke with expect the price to test the $1,300 dollar level once again. I think this selloff is overdone and I expect it to run out of gas and for the price to recover.
For the Gold bugs who use dollar cost averaging to play in the Gold market, this pull back is just another opportunity to take advantage of a product that still has upside potential. Significant global debt, trade disputes, a pause on rate hikes and a slowing economy should help the price in the long run.
The price of Palladium is consolidating at these levels. The most recent Commitment of Trader’s Report shows an increase of just 124 contracts. ETF holdings total 767,275 ounces, down 9,550 ounces in the year to date.
The Palladium EFP is still in a backwardation quoted minus 50 minus 40. So, with no new news to move the price either way, I expect the price to be range bound in the short term. In a market like this, a move of 30 to 40 dollars either way will still be considered trading in a range.
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.