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Daily Gold Report


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Gold and Silver traded higher today with silver showing impressive gains as it pushed through the 17.00 level to close up at 17.17 up .48 cents for the session. Gold was the weak sister showing modest gains of just about $8.00 to close at 1277.3. Pre-positioning ahead of the FOMC rate decision was one reason we had short covering in metals today with the other being the anticipated announcement of Fed governor Powell, who will be offered the position of Fed Chairman early next year to replace Janet Yellen. Powell is seen as dovish for the Dollar which normally is friendly for metals prices.The FOMC announcement this afternoon offered no surprises. A December rate hike which has become priced into the market is clearly still on the table and it would take a major downturn in economic data especially with unemployment figures to reverse sentiment. The question going forward into next year will be how many quarter point raises are in store from the Fed?They have signaled up to three but the market so far is only pricing in one for 2018.

Technically the big story today was silver. Its move higher versus gold today tells me a near term bottom could be in place. Look for the market to retest the 50 day moving average at 1722. The next level is the 200 day at 17.33 basis December futures. Above there look at 17.50 as a next target,although I wouldn't suspect that to be hit until unemployment is released Friday morning. Pre-report expectations come in for thenon-farm payrolls number at up 315,000.The Bank of England holds its monetary policy meeting on Thursday It is expected the BOE will tighten its monetary policy at Thursdays meeting. President Trump is slated to unveil his corporate and individual income tax plans at some point tomorrow which will undoubtedly draw criticism ahead of the Presidents trip to Asia on Friday. If dips do occur in gold, the 200 day moving average needs to hold at 1261.2. If it doesn't look for the sizable long in the market to unwind positions quickly in my opinion.

***Trade Alert***

Christmas Tree in Gold. Using February gold options. Look to buy one Feb gold 1320 call for 12 points. Sell one Feb gold 1360 call for 6 points. Sell 1 Feb gold 1400 call for 3 points. Cost per one lot is $300.00 plus commissions and fees. The key here is for gold to trade up and through 1293 and then test 1308. Should that happen the 1320 call premium will ignite versus the short calls. Call me with questions.

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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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