Two Headlines Could Impact Gold This Week

The Market Gage - Dillon Gage's Precious Metals Newsletter

Two headline stories on tap for this week that could have an impact on the gold price.

Tuesday and Wednesday, the Fed chairwoman, Janet Yellen testifies before congress to deliver her semi-annual testimony. On Tuesday she will testify before the Senate Banking Committee and on Wednesday she speaks in front of the House Financial Services Committee.

Everyone expects Chairwoman Yellen to repeat her message from last week that the Fed wil take a cautious approach to raising rates, as the U.S. economic data is still reported as “weak”.

Latest polls from the UK odds makers show that the odds of the UK leaving the EU is at 27 percent, putting pressure on the price of gold. Other polls show a much closer vote. (Anyway, at the time of this report gold is down $ 12.00 and looking at the equities, the Dow pre-opening figure is reported up 200 points).

All the world equity markets are up big today as the odds on the Brexit vote favor the UK staying in the EU.

Dollar index is in negative territory this morning and the gold ETFs continue their inflows, HELPING support gold from falling any further.

Wall Street gold traders have pulled out of their long positions and adopted a wait and see attitude. One trader told me this morning, “In the event of any unexpected news that comes out of the Chairwoman’s testimony, or any surprise in the Brexit vote, you could see a big move in the price of gold. I’m not comfortable carrying a position here because I just don’t know what can happen. It’s just too risky.”

My technical friends have asked me to share their thoughts this morning. They claim I haven’t given them enough coverage over the last month. So to be fair to my friends, (yes they have been very accurate in their levels in 2016) give Gold in the August contract a level of support at $1,280 and Silver in the September contract, must hold the $17.27 level to continue its rally to the upside.

Let’s not over-look the headlines that just DON’T go away and are positive for the price of gold.

  • Negative interest rates around the world
  • The continued migrant crisis in Europe
  • Our countries debt, that no one wants to address
  • U.S. entitlement expenditures keep increasing
  • First quarter GDP was .8 percent adjusted
  • Last jobs report an increase of only 38,000
  • One interest rate hike in the past ten years

We are programmed to focus on the news in front of us, but we cannot neglect the news that really matters to the price of Gold. Just look at the list of news items I just shared with you.

Have a wonderful Monday.

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