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Daily Gold Report


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Gold prices traded slightly higher in afternoon trading despite finishing the day session lower by $2.40 to settle 1253.1 basis June futures. The FOMC minutes were released after the close and revealed no major hawkish surprises. Despite some chatter in the market about the Fed not raising rates in June, market participants seem passive as there is an assumption ofa matter of when not ifconcerning any further tightening measures this year. While geo-political fears in Washington and on the Korean peninsula have subsided this week, traders may not want to be short heading into a three day holiday weekend. It is also important to remember that it is June Gold options expiration on Thursday May 25th. FOMC votingmembers in their minutes agreed that the Fed should begin to unwind their large balance sheet by capping securities purchases and reinvestments. While gold is currently trading $7.20 from the low of the day as of this post following the minutes release may reveal hints that investors view the Fed's actions as inflationary. Those looking for volatility may consider the following options trade. Using week 1 weekly options that expire on June 2nd, consider the following option strangletrade. Buy the June week 1 1280 call and atthe same time the June gold 1240 put for 4 points or $400.00. The risk on this option strangle is the price paid plus all commissions and fees. The Gold market has paused at this 1250 level-1260 level. I believe either two scenarios into next week, either we rally to 1287 on continued safe haven buying , or we challenge significant support levels at 1243 and then 1230 next week into and throughthe non-farm payroll next Friday.

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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