Gold Trying To Break $1,500 As Silver Moves Back Towards $18 Oz
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Last Friday, a disappointing September U.S. durable goods was reported. Durable goods declined 1.1%. This marked the first contraction in four months. Also, manufacturing PMI came in at 51.5, which is barely in expansion territory. These weak economic reports confirm the likelihood of the Federal Reserve lowering interest rates this week. This news took the price of Gold up to $1,512 per ounce, before positive news on progress with the Chinese trade negotiations caused the price to drop $14. Gold closed at $1,499 per ounce, up $11 per ounce for the week, but, in aftermarket trading, Gold moved to $1,504 on fresh demand.
This week, precious metal traders will be looking for direction for the Federal Reserve’s action on interest rates. Economist and market analysts feel that there is a 50% chance of a quarter point decrease in the Fed Funds rate, bringing it to one and a half percent. A quarter point drop should result in pushing up the Gold price to the next resistance level of $1,525 per ounce and back on a very bullish track.
This month, a number of large financial institutions have come out with predictions that Gold would reach anywhere from $1,600 to $2,000 per ounce as the world debt mounts and global economies worsen. Many of the world’s largest Central Banks have reported 2019 purchases of Gold are at record levels. I believe, after this year’s substantial increase of $227 (17.76%) in the Gold price, that Gold will reach $1,600 per ounce by year end and Gold is a bargain at the current price.
Today: A strong equity market, with the Dow Jones reaching a new high, is taking the focus away from commodities like oil and precious metals. Gold reached a low of $1,492 before buying appeared.
After reaching a recent low of $17.10 on October 16th, Silver moved above the key $18.00 per ounce level last Friday. Silver reached a high of $18.27 per ounce before ending the day at $18.03 in after-market trading on the highest volume of the month. Silver closed at $17.86 in regulation trading up $.35 for the week. What is more important about Friday trading was the December contract trading volume of 131,000 five-thousand-ounce contract. This is almost double the average trading volume for the month, and indicates a bullish sentiment by professional and commodity house traders. With the Federal reserve meeting and a strong trading volume, this week should offer a great indication of the short-term direction of the Silver price, which I believe will be higher. The Silver-to-Gold ratio dropped to 83.97-to-1, and is heading lower.
Today: Silver sold off with Gold reaching a low of $17.82 on light volume. If the Federal Reserve lowers interest rates later this week I would expect to see Silver move back over the $18 per ounce resistance level.
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Both Gold And Silver Break Below Test Support Levels ByApril 30 2024