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Weekly Gold Report


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Volatility cooled on Friday for both gold and silveras both traded sidewayswith spot contracts holding support levels into the weekend. Still, both metals contracts lost three percentfor the week. It was a wild ride as both gold and silver traded significantly higher on Monday and Tuesday amid geo-politicaluncertainty and economic uneasiness.The gains quickly evaporated with both markets experiencing mid-week reversals that caught the bulls by surprise. Wednesday's quarter point rate hike by the FOMC was expected but the hawkish overtones from Fed Chair Yellen caught gold and silver bulls by surprise as the Dollar rebounded while equities traded sideways. Prior to theFedpolicy meeting, August gold traded up to a weekly high of1284.2 while Julysilver traded all the way up to 1736.5. August gold finished the week losing $14.90 to close at 1256.5, while July silver lost .56 cents to close at 16.66.Janet Yellen in the post FOMC rate decision press conference kicked the can on inflation expectations not meeting the Fed'sinflation target of two percent,but rather focused onperceived futureeconomic data points like employment and GDP that in Yellen's view warranted future interest rate hikes and a potential end to an accommodative low rate policy. The Fed Chair also announced the beginnings of an unwind of the Feds massive 4.5 trillion bond balance sheet as economic conditions now allow forsuch measures tobegin. The near term winner hereso far has beenthe U. S.Dollar as it seems its free fall has stoppedandthe path of least resistance looks higherin the near term. In review, a higher Dollar, weak energy market,and steady equitiesdo not result for a rally in precious metals andin my view thereason why both gold and silver futures contractsboth lost three percent for the week. Still though, August gold futures held key moving average support with the 100 day at 1250.6 and the 200 day at 1250.3. These levels need to hold or August futures would most likely test the early May 2017lows down at 1221.0. With the President under investigation by special consul Robert Muelleralong with other geo-political worries, those two issueswereprobably enough to stem this latest slide in precious metal prices on Fridayand halt the sell-offinto the weekend.

Technical swing numbers for next week come in as follows for both August gold and July silver. For August gold, support is down first at 1244.6 and with a close under 1232.9 is next. Resistance is up at 1276.1 and with aclose over 1295.9. For July Silver, support is down at 1639.7 and with a close under 1615.6 is next. Resistance is up at 1714.2 and then up at 1760.6.

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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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