Commodity Update: Strong Economic data has moved commodities higher this week.
Gold opened the week at $1744 per oz and moved sideways until Thursday when strong consumer spending data and improving earnings moved to stabilize positive economic growth expectations calming down bond yields and pushing Gold higher Thursday with some additional follow through on Friday. The price has now broken higher than the 50 period moving averages the first “hurdle” of resistance, but now as the price moves closer to the $1780 to $1800 range there is significant resistance setting up a 2nd resistance “hurdle.” Late in Friday’s trading session the price is hovering right below $1780. If we can see prices move through this level and higher next week, we have a good opportunity to see a continuation higher to at least the $1840 to $1860 range. If prices stall at this resistance and bond yields move higher, we could see prices fall back to support around the $1680 level.
This week Silver opened at $25.26 and then bounced off of the 200 Moving average just above the $25 price point to move up to the 50 Moving average at $26 for an overall gain on the week. This push higher comes as the US dollar has pulled back as bond yields have stabilized this week. Also as the expectation for the economy improves the demand for industrial silver looks brighter on the demand side. Now that prices have pushed up to the $26 per oz, the market is at a very significant resistance level. If silver can push through this level next week, we could see the next resistance up around $28 per oz. So the price is going to be looking at continued good news on the economy to continue the nice move higher. If the price stalls at this resistance level we could easily see a retreat back to between $24 and $25 per oz.
Oil has had a very positive week opening up at $59.36 per barrel and moving up to above $63 per barrel on Thursday on strong recovery demand expectations. While Friday the price has stalled a bit, and flattened out, it remains above the $63 price for a weekly gain of more than 6% overall. Not only good news for economic growth in the United States but also globally including strong signs of growth out of China will push the global demand for crude oil higher. The question mark now comes from the supply side, where OPEC is seeing to ease some of the pandemic induced cuts to production. Oil prices are now sitting at a resistance level set back in February, and if prices can maintain these levels over the next couple of weeks, we could see this resistance become new support for prices to move above $65 per barrel in the short-run.
Bill Poulos is a co-founder and the president of Profits Run, Inc. Bill started the financial publishing company in 2001 with his son, Greg Poulos. Bill has been studying stocks and investing since the 1970s. Profits Run teaches those new to stock trading how to reduce risk while making strategic investments. More than 150,000 people have been helped with their publications, software, videos, and coaching. Crypto Profit Alert, 20/30 Wealth Trader, Rapid Income Engine, Premium Income Alert, and Automatic Income Engine are amongst the products crafted by the team at Profits Run. Poulos lives in Michigan with Karen, his wife of over fifty years.