Commodity Update: Gold gains big on U.S dollar weakness, but hits resistance on Friday.
Gold had been jumping up and down all week, but the bulls won the battle and gold will close higher on the week overall, even after a big slide on Friday erasing much of the weekly gains. Gold opened the week at $1734 per oz and moved higher on Tuesday, and Thursday to a high just below $1760 before dropping back to the low $1740s. Gold moved higher for the week after the Federal Reserve minutes released a continuing weak monetary bias which weakened the U.S dollar and strengthened gold during the week with a big jump Thursday on continuation of the weakness of the Dollar and fears of increasing inflation. Friday morning came a big drop back below $1750 which is proving to be strong resistance. By late Friday, the price has settled at around $1742. The longer view is bullish but prices will need to break free of the current range.
Silver opened the week at $24.93 per oz. and moved up over the week based on the U.S. Dollar weakness mainly due to the ongoing weak monetary policy of the Federal Reserve and increased inflation concerns. The price seems to have some solid support right at the 50 period Exponential Moving Average or about $25 per oz. Silver has some additional strength based on expectations for high industrial demand as the economy recovers from the Covid Crisis into the spring and summer.
Oil opened at $61.25 on Monday and collapsed down to as low as $57.65 before closing the day at $58.78 for a big daily drop after the long market weekend. For the rest of the week by comparison moved much less with lower volatility and more stability between $59 and $60 per barrel. The sideways range trading is set up mainly by a lack of certainty in the economy with mixed signals on both the supply and demand outlooks. Until a clearer picture emerges concerning demand from the economic recovery from Covid and the supply issues in the Middle East, expect the market to just chop back and forth. As of late Friday’s trading the price has moved down to the bottom of the range at about $59.35.
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