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Daily Gold Report


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December Gold futures rallied on Wednesday posting a daily gain of $7.90. Silver again pushed through the 17.00 level again and made a new weekly high at 1726.5 before pulling back near the close to end the day session at 1713.5 basis December futures. Rumors out of Washington that spoke of top congressional leaders pushing backa possible delay in implementing lower tax rates for corporations, following a media report that Paul Ryan and his fellow Senate Republicans were exploring the option was one reason for the rally. While there was a brief dip in the Dollar and stock indices on the headline, gold and silver both retreated in the aftermarket with silver pressing the 17.00 level ,while gold was near 1280.0 in late afternoon trading. Gold continues to trade above the 200 day moving average at the 1262 level and with today's close finished the session over the 100 day at 1279.1. However as the stock market recovered in afternoon trading to close near session highs, the upward momentum in metals faded. In my view, stock indices futures and the risk on vibe by investors that continue to push the equity sector ever higher has stymied any continued advance in metals in the last few weeks. It is the main reason the market has been range bound. Silver which can be much more volatile has maintained a range of 16.80 to 17.25. Gold's recent range in my view is between 1265 and 1285. I believe there are reasons to turn bullish both metals but advances in the Dollar, all time highs in equities, and depressed values of the volatility indexes sometimes referred to in the trade as the fear index, have kept rallies muted at the aforementioned ranges.

If and I stress the word"IF"; the market hears more talk of delayed corporate tax reform well into 2018, I would look for metals to break out of these ranges to the upside. It is my belief that the Trump administration would have a major problem with Congressional leaders kicking the can down the road on tax reform. Stay tuned here. Those considering a bullish play in silver, may consider the following long term trade.

Christmas Tree in Silver. Bid 6 points upon entry. Trade cost $300.00 plus all commissions and fees.

Risk would be a futures close above 20.75 at option expiration in late February. Feel free to call me with questions on strategy here

Buy 1 of the March 18 Silver 18.00 calls

Sell 1 of the the March 18 Silver 19.00 calls

Sell 1 March silver 19.75 call.

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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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