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Daily Gold Report


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Gold and silver futures fell apart in the afternoon session following Janet Yellen's press conference. The Fed as expected raised rates a quarter point, however the Fed Chair's comments were seen as hawkish and supportive for the Dollar. She left the door open for continued unwinding of the Fed's balance sheet which means an unwind of their $4.5trillion balance sheet bondportfolio, while noting that further rate increases are likely to come. The hawkish view on rates may have caught precious metal bulls by surprise as August gold futures were trading near 1260.0 an ounce near the electronic close down almost $15.00 from settlement in late afternoon trading. July silver futures were down almost .28 cents from settlement trading below $17.00 an ounce at 16.86. Yellen said that because of current economic conditions, the committee anticipates further interest rate increases this year and next. The Fed Chair then shrugged off weak inflation concerns despite the Fed's forecast of 1.6 percent inflation according to projections this year. Clearly the Fed Chair is focused more on perceived future economic growth rather than the Fed's own inflation expectations of 2 percent. The stock market and bond market reaction to Yellen's commentswere largely muted as both moved slightly lower while the Dollar rallied.

Chart action for both gold and silver will be paramount going forward after the late session sell-off today. The 50 day moving average is where gold is trading as of this post at 1263.9. Should gold not hold this level, the 100 day at 1249.9 and the 200 day at 1251.2 will need to hold or the market could retest the mid-April lows justbelow 1220.0. Keep in mind August gold traded all the way up to 1284.0 in early morning trading following disappointing CPI and retail sales results. For July silver, second support for the week is down at 16.78. A close below here sends the market to 16.56.

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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