Weekly Commodities Update: Supply and Demand

Bill Poulos and his son, Gregory Poulos, co-founded Profits Run, Inc., a financial publishing company, in 2001. Bill had retired from a thirty-five year employment with General Motors. While working for GM he began studying the Stock Markets as a hobby. Bill Poulos brings decades of investing experience to the clients of Profits Run. The company provides materials, software, and online courses to educate on making smart investments with minimal risks. Bill created the Profits Run Starfish Award to celebrate citizens making a difference in their communities. He married his high school sweetheart in 1969. They have three adult boys and two grandchildren. Below, Poulos updates us on the weekly commodity prices.

GOLD — After last week’s big drop, Gold made some headway and will finish the week higher. Gold opened at $1458.90 per oz. Gold moved down to $1450 briefly and then moved back up to close on Thursday just above $1470. This move higher on the week can be mostly attributed to upbeat expectations concerning the U.S/China trade deal. The prospects of a deal are boosting the price off the earlier lows. The price action this week set a new level of resistance at $1470 and new support at $1450. In late trading in Friday’s session prices have moved off the highs and have moved a bit lower after the U.S retail sales and industrial production numbers failed to inspire additional confidence in U.S. economic growth. Trading at $1468 in late on Friday while a bit lower than the daily high, still on track to end the week on an up note.

SILVER — Like gold and other precious metals, silver prices will end the week higher. Opening at $16.77 per oz. on Monday and moved up above $17 per oz on Thursday. Friday the price opened right at $17 but moved down just a bit after the lackluster U.S data on retail sales and industrial production was released. However, in later trading on Friday the price has moved back up to right around the open of $17 per oz. This indicates that steady flow of investors working to keep the prices very steady. Current support is right at $16.70 with resistance at $17. With trading very close to this resistance level has demonstrated a robust demand when the prices drop below the $17 price point.

OIL — This week we have seen oil prices very range bound. Monday’s open at $57.33 and has traded between a low of $56.26 up to highs at $57.75 a tight range for the week. This consolidation has had the price of oil moving sideways for the last couple of weeks since the beginning of November. When the price is in a tight consolidation like we have seen in the last several weeks, there is a very close relationship between supply and demand. On the demand side, optimism concerning a resolution in the Trade war between the United States and China, and the on the Supply side there are signs the OPEC and other producers are talking about not cutting production soon. This has created an unusual parity that most likely won’t last for long. If prices break above $58 or below $56 per barrel, we could see a break in the current consolidation.

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.

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