Commodities Weekly Update GOLD/SILVER/OIL
Bill Poulos is an American investor, published author, financial investor, and retired General Motors executive. His books are written on investment strategies, like his book titled, Bill Poulos’s Simple Options Trading For Beginners: How to trade options from A to Z explained in plain English. When Bill retired from General Motors he and and his son, Gregory Poulos, started Profits Run, Inc. with the intention of helping individuals make smarter investments while minimizing risks. Profits Run provides educational materials, software, courses, and coaching. Bill contributes regularly to online platforms, such as Investing, Yours.org, Medium, and LinkedIn. Profits Run believes in giving back to the community and celebrating those who have made a difference with the Profits Run Starfish Award. Below, Bill discusses this week’s commodities.
Gold started the week on a bearish note on Monday and Tuesday, opening just above $1340 per oz and falling to a low of $1320 per oz which is not too unusual after a big rally last week. However, the down trend didn’t last long and by Wednesday the bulls re-entered the market breaking the fall and closed for the first day this week. With a steady bullish move away from the bear flag and a clear bounce at the $1320 price, by Friday gold had moved back into positive territory for the week as the haven effect of gold resumed, as the uncertainty in the overall market conditions continued. This strong bullish move Wed thru Friday is based primarily on renewed expectations for a FED rate cut brought about by this uncertainty and the accompanying potential FED rate cut. Significant resistance is at $1352 per oz and the market need to close above this level for the rally to continue unabated. Currently trading late on Friday, the price is hovering just below $1340, off the high for the day, and about even for the week.
Like Gold, Silver had a big drop early in the week, opening at $15.00 and dropping down to a low of $14.65 on Monday, but has rebounded and has moved up the rest of the week to recover from most of the Monday drop on Friday. Friday retreated a bit back below Thursday’s high, not wanting to close above the $15.00 level which has been holding as a significant resistance level. Silver has moved above the 50 MA, which is a strong bullish indication that buyers are trying to push it higher and to break that resistance ceiling. Late on Friday the price is trading at $14.84, just below the $15.00 level. The short-term key is if we can get a close above the $15.00 price level. If so, we could be looking at a new rally. Time will tell.
Oil this week, opened at $54 per barrel and then Mon-Wed moved right back down to last week’s lows around $50.75 to close lower than any day since the first week of January for perspective. Thursday’s and Friday’s trading has regained some strength to buck the bearish trend but has only been able to move back up to about $52.40 midday Friday. Overall, we are still looking at a weekly decline as new expectations for weaker demand are forecasted. Also Friday morning the IEA released its monthly report with the outlook for oil demand growth has weakened for the remainder of 2019 on worsening predictions for world trade. Also, the announcement last week by the U.S administration changing the Ethanol restrictions is also putting pressure on Oil this week. These main factors point to the prospect that we have not seen the price bottom out yet.