Here's Mikes call on gold and silver. Read more of his calls for this week by visiting here.
Gold futures in the April contract are trading far below their 20 and 100 day moving average telling you that the trend is to the downside after settling last Friday at 1,213 while trading at 1,172 down $22 this Friday afternoon as the monthly unemployment report was construed as bullish sending gold to a 9 week low.
The U.S dollar is hitting another contract high up 110 points putting pressure on the precious metals as I'm currently recommending a short position in the mini contract which is $33 for every dollar move while placing your stop above the 10 day high which currently stands 1,223 risking around 50 points or $1800 per contract plus slippage and commission.
In my opinion I believe the U.S dollar will continue its bullish trend and therefore should continue putting bearish pressure on gold and silver prices here in the short term as the next level of support is at 1,165 and if that is breached I think that we test the contract low around 1,130 so continue to play this to the downside as the chart structure will start to improve later next week tightening the stop and reducing monetary risk.
Many of the commodity and stock markets were lower today due to the fact that United States treasury bonds plummeted this afternoon sending yields higher as now the speculation is that the Federal Reserve will start to raise rates in June which is another pessimistic fundamental indicator towards gold prices.
Trend: Lower
Chart Structure: Solid
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Silver futures in the May contract are trading below their 20 & 100 day moving average down about $.30 this Friday afternoon trading at 15.85 an ounce settling last Friday at 16.56 down around 70 cents for the trading week hitting a 9 week low as the U.S dollar is sharply higher once again. I am currently recommending a short position in silver in the mini contract which is $10 for every cent while placing your stop loss above the 10 day high around 16.90 risking around a $1.00 or $1,000 per contract plus slippage and commission.
The U.S dollar is the reason to blame for silvers weakness in today’s trade as I do believe commodity prices as a whole continue to move lower in the short time as the dollar looks to possibly hit 100 so continue to play this to the downside as the next major level of support is 15.50 which was hit on many different occasions only to rally every single time, however if that’s broken you would have to think that the bear market would resume.
The trend is your friend in the commodity markets and the trend is to downside at the current time however if you disagree with my opinion and you think prices are going higher my recommendation would be to buy at today’s price while placing the stop loss below 15.50 risking $.35 or $350 per mini contract plus slippage and commission, however I am currently recommending a short position in silver as prices look to retest contract lows in my opinion.
Trend: Lower
Chart Structure: Solid
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