Coronavirus Controls Commodities
Bill Poulos is a Greek American investor, published author, financial educator, a retired automotive executive, and the president of Profits Run, Inc. The company provides published materials on investing for wealth management. Profits Run provides the following programs to their clients, 20/30 Wealth Trader, Earnings Profit Alert, Automatic Income Engine, Premium Income Alert, and Rapid Income Engine. The company’s name is derived from the popular phrase “cut your losses and let your profits run.” To learn more about Bill and Profits Run, follow their YouTube channel and connect with Poulos here on Medium. He is married with 3 adult children and 2 grandkids. He resides in Michigan where Profits Run is located. Below, Bill updates us on the commodities market.
GOLD
Gold has traded sideways this week with a bullish move going into the weekend. Gold opened on Monday at $1731.56 and moved very choppy and sideways until Friday when there has been a strong bullish move pushing prices right up $1745 which is a significant resistance level. This rally on Friday can be mainly attributed to Fed Chairman Powell’s remarks that additional stimulus while being contemplated is only in the early stages of discussions and not close to being implemented in the near-term. This resistance range between $1740 and $1750 where we are currently sitting is the highest gold prices have been since 2012. Unless the Fed does something else dramatic, Gold is setting up for higher prices, but must break through the current resistance level. On the weak side, current support is around the $1680 level and has been holding strongly above that level since mid-April.
SILVER
Silver is going to end the week slightly higher after moving mostly sideways all week. The week opened at $17.46 and is currently trading late on Friday at $17.62 inside the range established over the last several weeks between $17.00 to $18.00. While the week is ending higher for the week, we are just about the middle of this overall range, so there really has not been much movement and the prices have really been consolidating and not breaking any new ground. Much of this has been being driven by the uncertainty of the current Covid-19 economic situation and the uncertainty of the growth coming from the loosening of the restrictions and how long that will take and the possibility of a second wave was big in the news this week. The industrial demand for silver or the lack thereof is a big determining factor, and much is still up in the air as far as how this will play out. This uncertainty is directly contributing to the flat and choppy consolidation.
OIL
This week in oil will end on a positive note, with oil prices opening at $36.50 per barrel and ending the week right around $39.65 after hitting $40.49 as the daily high before pulling back just a bit from that high. There is strong resistance right at the $40 level set back earlier in June. The current push this week for higher prices is the feeling that OPEC is getting stricter compliance on the production cuts coming out of the OPEC countries, putting more pressure on pricing. The unknown factor keeping prices at or below $40 per barrel is the demand for more oil as the economic situation improves and how fast that will happen. If there is a second wave that could throw demand off for some months, if not the economy will demand more than the reduced supplies and prices will move higher. Until more is known, we may be stuck in this trading range we have seen for the last month or so, between $32 support and $40 resistance.