Weekly Commodities Update: Trade Talks Take Off

Bill Poulos is a Greek-American investor, published author, financial educator, and a retired General Motors executive. His parents were first generation immigrants from Greece. They settled in Detroit, Michigan, where Bill grew up. His book on Amazon, Bill Poulos’s Simple Options Trading For Beginners: How to trade options from A to Z explained in plain English. In 2001, Bill retired from a 35 year career with General Motors and co-founded Profits Run, Inc. The financial publishing company’s goal is to provide individuals with materials to make educated investments with minimal risks. The company achieves this by publishing investment materials, investment software, online courses, and one-on-one coaching. Profits Run has helped investors in over 150 countries around the globe. Bill met his wife, Karen, in their neighborhood growing up. They were married in 1969. Karen and Bill have 3 sons and 2 grandchildren. Below, Bill Poulos reveals this week’s commodities update.

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GOLD

Gold opened the week $1513.73 per oz. and moved down this week with a low on Friday of $1456. The breakdown in pricing which started on Monday and Tuesday. It has moved down again significantly on Thursday, mostly attributed to optimism surrounding the U.S. China trade talks. They seem to be moving in a positive direction with some real “light at the end of the tunnel.” This lessens the demand for Gold as a Risk hedge. However, a deal has not been completed and signed yet. The President has mentioned that he hasn’t yet decided whether to remove the tariffs, which is surely a big deal to the Chinese officials. If the deal continues to move forward, there are more downsides to Gold, all the way down to just above the $1400 per oz. level. However, if the talks break down and there is no short-term deal, be ready for Gold to jump back up to above $1550 or higher. These trade negotiations are becoming a driving force in the precious metals market so keep close tabs on the breaking news.

SILVER

Silver opened the week at $18.09 per oz. and along with the other precious metals, basically fell out of bed to a Friday low of $16.70. Trading below the $17.00 Support level is significant. Like Gold and other precious metals, this drop is primarily since there has been widespread optimism on the U.S. China trade talk front. While there is no deal signed as of this writing, things look more optimistic that the last several weeks. If a deal is signed, the prices could easily drop to the next support level around $16 per oz. or lower. If talks break down again, be ready for a rally based on a huge risk demand that could push prices back up to the $19.50 levels or beyond. Time will tell on these trade negotiations in the short term, one way or the other.

OIL

Oil opened this week at $56.06 per barrel and has really been just chopping sideways in a range bound movement between about $56 and $57 per barrel all week. Oil prices looks to close at the top end of the weekly range on Friday with current trading around $57.20 a bit higher than the week’s open. The big picture on oil prices is being driven by the ongoing uncertainty surrounding the U.S. China trade talk and how the outcome of these negotiations are affecting global demand for this year and next. Now, these negotiations have looked to have a positive resolution, which is signed could have a more positive effect on global growth and drive up demand for Oil, putting more pressure to drive prices higher. Significant resistance is at around $62 per barrel and Support is around $51 per barrel, with current trading right in the middle. We should see Oil prices continue to move more sideways until there is better word on the implementation of at least a “phase 1” of the trade deal.

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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