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Daily Gold Report


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Gold futures rose to start the week in impressive fashion. December gold futures gained over $7.00 to close the session at 1294.4. December silver futures rose as well but only slightly to close at 17.02. While today was option expiration for the December contract for gold and silver, volume was heavy in the spot gold contract at just under 300 K contracts. A weaker move in the greenback to multi week lows and some fresh bullish physical demand news prompted more buying overnight and into the morning for gold as the yellow metal traded up to a new monthly high at 1299.0, before retreating into the close. While equities showed no signs of backing off, the dollar recovered throughout today's session and therefore some profit taking ensued in the metals. In physical demand news, Chinese gold imports from Hong Kong to the mainland jumped by 56 percent last month. Also a positive Indian gold import forecast and overnight Asian buying interest off of weaker Asian equities also helped to support. The news cycle is on fire lately with the rise of Bitcoin. The cyber-currency is trading at over $9,500.00 per unit with the latest push higher being aided by the opening of 13 million retail accounts throughout the world. In fact it was noted that 100 K accounts have opened since Thanksgiving. I'm advising extreme caution here to those invested and who are thinking to invest. In my experience, when the general public enters into a position en masse like this, that the end of the move or in Bitcoins' case this rally, is near an end. The public is usually the last segment into a trade that has already made a sizable percentage move and when the domino's fall, the last ones out. It can get ugly and get ugly real quick. Exchanges and Wall St. have taken notice for sometime as the CME group will be offering futures and options contracts in the near future on the cyber currency potentially adding some validity to what was previously thought as a millennial fad. We shall see how this plays out but I'm concerned on if we see a sizable sell-off in Bitcoin, do we see a selloff in the Comex 100 oz futures contract in tandem or do the bitcoin users use the futures markets as a hedge?

Lets look at some technical levels for gold and silver for the remainder of the week. Resistance sits at 1300.4. A close above and 1308.4 is next. A close above this level and 1324.0 is the next target to the upside. Support is seen at 1283.4. Next level to the downside is the 200 day at 1266.8. a close below here and trend line support is at 1256.5. For silver, support is down at 16.82 and below there at 16.65. Resistance is up at 17.14 and then major trend line resistance at 17.57.

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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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