Trade Negotiations Take a Toll on Gold

Gold has been on a wild ride this week. Gold opened on Monday at $1285.62 and ran up hard on a lack of results concerning the U.S- China trade negotiation. In fact, it became more likely that there was no quick solution in site, therefore there was panic, and Gold took off and ran up to a high of $1301.40 per oz, just above the significant resistance $1300 level. At that point, Monday there was a panic in the Stock Market, and everyone ran to safety, pushing Gold higher. But, as it turns out, Monday was the highest close of the week, just about $1300 per oz. From there Gold has closed lower every day for the rest of the week, due primarily to good U.S data and a strong U.S. Dollar the Monday gains have been completely wiped out as the safe-haven concerns dissipated. So much so that Thursday and Friday gold dropped down very hard, with Gold currently trading late on Friday just below $1276 per oz. This is a significant drop in two days, wiping out all the recent gains since the April. To the downside, if Gold closes below, significant support at around $1270 per oz, we could see a move down to $1250 before support is regained. U.S China relations aside in the long run, the demand for Gold is largely contingent on the strength/weakness of the U.S. dollar.

Along with Gold and other precious metals, Silver took a big dive on Thursday and again on Friday as the U.S. dollar strengthened and push “safe haven” asset values down. Currently trading below $14.50 per oz on Friday the lowest price for Silver this year. The next significant support level is $14.20 with major support at the $14.00 level.

This week we have seem US Oil prices reverse their recent 3-week slide by opening at $61.58 per barrel and moving up sharply on Tuesday, Wednesday and Thursday on fear based on potential supply disruptions in the Middle East and higher inventories in the U.S. Now on Friday US Oil is trading at around $62.80 a barrel, a bit lower than the close of Thursday which was $63.11 as fears have dissipated slightly. The bigger picture is that for the last several weeks, oil have been trading at or around $62.00 give or take a dollar, which seems stable, however what you have is really the bears and bulls not able to make up their minds. Bulls looking at supply shocks and bears looking at decreasing global demand. These two things will continue to be important in driving prices higher or lower. But for now, the market is stuck in the middle with prices stable around $62 per barrel.

About Bill Poulos

Bill Poulos is a Greek American investor who was born and raised in Detroit, Michigan. In 1969, he married his high school sweetheart, Karen. Bill attended a co-op program through General Motors where he worked on the factory floor and went to college. He advanced through the corporate ranks during his 35 years with General Motors. In 2001, Bill retired and began Profits Run, Inc. with his son, Gregory Poulos. Profits Run provides investing materials to support individuals in making wise trades while minimizing risks. They have assisted over 100,000 investors with managing their wealth. Bill presents to many online news platforms, such as Investing, LinkedIn, Yours.org, and here on Medium. He is the author of several books on investing. Bill and Karen are still blissfully married and reside in Wixom, Michigan. Subscribe to Bill’s YouTube channel to learn more about Profits Run, Inc.

Bill Poulos is an author, retired automotive executive (General Motors), and co-founder of Profits Run, Inc. Bill offers insight into the economy and trading.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store