Bill Poulos is an avid investor, financial educator, published author, and president of Profits Run, Inc. The company educates individuals on making calculated trades while using proper risk management. Bill is the author of several books on investing in the markets. Bill contributes regularly to several online news platforms on current economic trends. Recently, he applauded Amazon’s Jeff Bezos’s management style. Below, Bill gives us an update on this week’s commodities.
GOLD
Gold opened the week at $1305.27 and has moved steadily up all week to be currently trading at $1343 per oz mid-session Friday. This weekly rally has pushed gold just below the February 2019 high of $1344 per oz. This move comes as the EU has had a more bearish outlook pushing the ECB to take a more dovish stance on interest rates and suggest a potential easing of rates. In addition, in the US the employment numbers are out today, show a downtrend in hiring which has people hoping for an easing stance out of the Federal Reserve, which was hinted to this week as well. In the US there is a fear that the trade war maybe starting to affect the economy negatively already, almost certainly pushing the FED into a defensive stance. When it comes to Gold, this week clearly removed the bearish overall trend in precious metals as the “safe haven” effect has kicked in with Gold breaking out of the previous downtrend. From a technical analysis standpoint, the 10 day Moving Average has crossed above the 50-day moving average further confirming the short-term uptrend. In addition, the MACD momentum indicator has also confirmed a shift from bearish momentum to bullish. If the economies of the US and EU continue to slow, this short-term bullish trend could continue for some time.
SILVER
Silver like Gold has moved higher this week, clearly taking on a bullish mood compared to the negative downtrend silver has experience for months now. Silver started the week at $14.55 per oz. and has moved up all week, and is currently trading above $15 per oz. This move higher is a clear momentum shift from the previous several months of bearish down trend. If the breakout can hold above the significant resistance of the $15.00 per oz. level, this could be the beginning of a new Silver rally. The next higher resistance from here is about the $15.60 level on the way back to $16.00 per oz.
OIL
The week started with Oil opening at $53.26 per barrel and continuing its multi-week slide all the way down to below $52 per barrel. For perspective, just 3 weeks ago, U.S. Oil was trading above $66 per barrel. However, the week is going to close above $54 per barrel the first weekly gain in several weeks. On Thursday Oil bounce of the lows and moved up which continued Friday, so we have had a good bounce this week. Concerns about Mexican oil supply problems due to new tariffs with Mexico, Saudi’s extension of production cuts that are due to expire at the end of the month and hopes of a FED interest rate cut, have all worked to push the price of Oil higher and may be sustained if these things all happen. But in the short run, at least the fall in oil prices has taken a breather this week. There is still long-term pressure on the price, so time will tell is this is a sustained bullish rally or if it is just a stop on the way to lower prices.