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Daily Gold Report


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Daily Gold Report for May 8, 2017

Gold and Silver futures held steady following no surprises in the French Presidential election. Junegold futures settled at 1227.1, up.20 centson the day.While the Dollar received a bounce higher and equities held steady for the most part, last week's slide in prices didn't result in any new selling to begin the week. It maybe the calm before the storm that both gold and silver don't see further liquidation and continued back and fill on the charts. Noncommercial and Non reportable funds showed a long position for silver at 88K contracts a decrease of over 21K contracts as of May2nd. For Gold, the long positions were pared by over 8K contracts. The long positions for both are probably over stated in my view as gold is off $25 from the May 2nd settle while silver is off .62 cents. Traders who had priced in a dovish Fed and a weak jobs number were disappointed last week hoping for higher prices. The election over the weekend offered nothing for the bulls either. The market therefore goes back to watching equities, the Dollar, and geo-political news for price direction. There hasn't been anything major to report on any bullish demand news from Asia, and with Gold down already 5 percent from the yearly highs, I look for some more back and fill on the charts before we bounce higher on short covering. Look for Silver to challenge15.89 an ounce whileJune Gold probing down to 1211.0.Of course this premise is based on nothing else entering into the market. Regarding the administration in Washington, it appears as if gold traders sit and wait for the next crisis or worry that shifts market psychology into safer have assets like gold and silver. In my opinion it's just a matter of when. With this break in futures prices, the opportunity to sell near term puts to buy long term call strategies has become more appealing in my view for those looking at bullish strategies.

Trade idea: this strategy is very risky but the reward if the timing is correct would mean a successful trade.

Sell 1 July 17Silver 15.50 put for 20 cents,for a$1,000.00 credit

Buy the Dec 1718.00-19.00 call spread for 18 cents or $900.00 debit

One would be collecting $100.00 per spread here minus all commissions and fees. July silver needs to hold 15.90 to the downside, if not exit the spread. As long as the short put settles out of the money at option expiration in late June, the trader is left with a debit call spread here to see if silver futures make a push higherahead of option expirary in late November.

For those interested I hold a weekly grain webinar each Thursday at 3pm. It is free for anyone who wants to sign up and link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

Sign Up Now

Sean Lusk

Director Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

slusk@walshtrading.com

www.walshtrading.com

Walsh Trading

53 W Jackson Suite 750

Chicago, Il 60604



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About the author


Sean Lusk is a registered commodity broker and Director of the Commercial Hedging Division of Walsh Trading in Chicago. Sean began in the business as a runner on the trading floor during summer breaks from college in 1993. Upon his graduation from Southern Illinois University at Carbondale in 1996, Sean began his career on the trading floor of the Chicago Mercantile Exchange (CME). Overseeing billions of dollars of transactions working as a clerk in the Eurodollar pit, Sean took the next step and became a floor broker and member of the CME in 2003. He handled customer orders for banks and investment houses from all over the world from inside the Libor pit at the CME.

Now, at Walsh Trading, Sean utilizes his experience in the marketplace and his professional client service skills to aid and assist customers in their trading endeavors.  

He writes daily and weekly commentaries focusing on both the Precious Metals and Agricultural Markets along with related market activity.

Sean has been quoted in various media outlets discussing futures markets. 

These include:

 

  • Futures Magazine
  • Reuters
  • Forbes
  • Kitco
  • Nikkei Press
  • CCTV.com

 

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