Three Reasons Gold Failed at Record Highs
Gold (December) / Silver (September)
Gold, last week’s close: Settled at 2427.9, up 28.0 on Friday and down 18.9 on the week
Silver, last week’s close: Settled at 28.02, up 0.045 on Friday and down 1.279 on the week
Gold and Silver futures are working back from last week’s beatdown. We believe the continued weakness is a near-term phenomenon and the result of three factors. Weakness is closely correlated to volatility associated with an unwind of the Japanese Yen carry trade. Also, the communist party of China prioritized quality growth over stimulated growth. With China’s economic growth trajectory deteriorating, the country is essentially exporting deflation. Lastly, speculative positioning in Gold became overzealous and a move off record highs created a liquidation event.
December Gold futures are now front month, and strength overnight tested major three-star resistance, aligning with a .382 retracement from last week’s low back to the prior week’s all-time high at 2451.5. We will be looking for balance at 2436.7 in order to hold a constructive session. Silver certainly lagged in its strength Sunday night and continues to struggle against key resistance at 28.28-28.34.
Bias: Neutral/Bullish
Resistance: 2451.5***, 2464-2468***
Pivot: 2436.7
Support: 2427.9-2430.5***
Silver (Sept)
Resistance: 28.28-28.34**, 28.90-29.06****
Pivot: 28.10
Support: 28.04**, 27.91-27.95**, 27.75**, 27.54**, 27.33-27.40**, 26.61-26.98****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Gold, last week’s close: Settled at 2427.9, up 28.0 on Friday and down 18.9 on the week
Silver, last week’s close: Settled at 28.02, up 0.045 on Friday and down 1.279 on the week
Gold and Silver futures are working back from last week’s beatdown. We believe the continued weakness is a near-term phenomenon and the result of three factors. Weakness is closely correlated to volatility associated with an unwind of the Japanese Yen carry trade. Also, the communist party of China prioritized quality growth over stimulated growth. With China’s economic growth trajectory deteriorating, the country is essentially exporting deflation. Lastly, speculative positioning in Gold became overzealous and a move off record highs created a liquidation event.
December Gold futures are now front month, and strength overnight tested major three-star resistance, aligning with a .382 retracement from last week’s low back to the prior week’s all-time high at 2451.5. We will be looking for balance at 2436.7 in order to hold a constructive session. Silver certainly lagged in its strength Sunday night and continues to struggle against key resistance at 28.28-28.34.
Bias: Neutral/Bullish
Resistance: 2451.5***, 2464-2468***
Pivot: 2436.7
Support: 2427.9-2430.5***
Silver (Sept)
Resistance: 28.28-28.34**, 28.90-29.06****
Pivot: 28.10
Support: 28.04**, 27.91-27.95**, 27.75**, 27.54**, 27.33-27.40**, 26.61-26.98****
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
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