Gold Traders’ Report - July 9, 2019

Jim Pogoda, Senior Gold Trader, Gold Bullion International 
JUL 9, 2019

Gold continued to soften last night in a range of $1386 - $1396.50, remaining choppy and largely fading movements in the US dollar.  It edged up to its $1396.50 high during Asian time as the DX traded modestly lower to 97.34.  During early European time, gold fell to its $1386 low, as the DX advanced to a fresh 3-week high of 97.59.  The dollar was helped by softness in the euro ($1.1219 - $1.1193, speculation of new ECB QE) and the pound ($1.2522 - $1.2439, no-deal Brexit fears grow, stops below $1.25, 6-month low), and a stronger than expected reading on the NFIB Small Business Optimism Index (103.3 vs. exp. 103.1).  Later during European hours, gold rebounded to $1392 from bargain hunting buying, and a modest pullback in the DX (97.52).   The US 10-year bond yield moved higher (2.049% - 2.068%) and was a headwind for gold, while global equities were mostly weaker and gold supportive.  The NIKKEI was up 0.1%, the SCI was down 0.2%, European markets were off from 0.3% to 1.3% (BASF profit warning, continued fallout from Deutche Bank’s restructuring weigh), and S&P futures were -0.4%.  Oil was firmer on supply concerns (WTI from $57.45 - $58.19) and supportive of stocks.

Ahead of and through the NY open, some dovish comments from White House Economic Advisor Kudlow promoting Fed rate hikes took the 10-year yield down to 2.047%, and the DX to 97.47.  Gold continued to recover, and rose to $1394.50.  

After opening weaker (S&P -14 to 2961, downgrade of 3M weighs), US stocks battled back to unchanged by mid-morning (2976), while the 10-year yield edged back up to 2.067%.  The DX ticked up to 97.54, and gold fell to $1390.  However, some bargain hunting buying brought it quickly back to $1392. 

Later in the morning, US stocks turned back down (S&P -5 2971), with losses in the Consumer Staples and Materials sectors leading the decliners, and with a pullback in oil (WTI to $57.38) contributing to the weakness.  The 10-year bond yield slipped to 2.053% while DX fell back to 96.46, and gold advanced.  Some light buy stops were hit over the night high to reach its high of $1400. 

In the afternoon, the S&P traded either side of unchanged, while the 10-year yield was either side of 2.06%.  The DX clawed back over 97.50 to 97.53, and gold retreated to $1396. 

Open interest was off 1.4k contracts, showing a net of long liquidation from yesterday’s decline.  Volume was much lower but still very robust with 377k contracts trading. 

All markets will continue to focus on geopolitical events (especially Brexit news and US-Iran tensions), developments with the Trump Administration (especially on US-China trade, potential legal issues), Q2 corporate earnings, oil prices, and will turn to reports tomorrow on Japan’s CPI, China’s CPI, PPI, New Yuan Loans, UK GDP, Industrial Production, Construction Output and Trade Balance, US Wholesale Trade Sales, Wholesale Inventories, Oil Inventories, 6/19 FOMC Meeting Minutes, and testimony from the Fed’s Powell for near term direction. 

 

In the news:

Gold backed ETF AUM grew 15% in June, largest monthly increase in 7 years:   https://www.gold.org/goldhub/data/global-gold-backed-etf-holdings-and-flows

There’s always a place for gold in your portfolio – BlackRock:   https://www.cnbc.com/video/2019/07/09/theres-always-a-place-for-gold-in-your-portfolio-strategist-says.html

Central bank demand – what’s new in May?:   https://www.gold.org/goldhub/gold-focus/2019/07/central-bank-demand-whats-new-may

Poland Central Bank gold reserves rise sharply in June:   https://www.thesiriusreport.com/economics/gold-poland-nbp/

 

YTD Performance


12/31/2018

7/9/2019

Change
% Change
Gold


1282.5

1396

113.5

8.850%

DX


96.06

97.51

1.45

1.509%

S&P


2505

2975

470

18.762%

JYN


109.63

108.92

-0.71

-0.648%

Euro


1.1466

1.1209

-0.0257

-2.241%

US 10-year bond yield


2.69%

2.067%

-0.0062

-23.045%

Oil (WTI)


45.45

57.88

12.43

27.349%

 

Resistance levels: 

$1400 -  7/9 high

$1400 – options

$1408 - up trendline from 5/30 $1275 low

$1408 – 7/8 high

$1412 – double bottom – 6/25 and 7/3 lows

$1423 -24 – double top, 7/4 and 7/5 highs

$1425 – 6/28high

$1425 – options

$1436-39 triple top – 6/25 7/2, and 7/3 highs

$1437 -  down trendline from 6/25 $1439 high

$1446 – 5/12/13 high

$1450 – options

$1479 – 5/5/13 high

$1488 – 4/28/13

$1496 – 4/14/13 high

$1500 – options

$1591 – 4/7/13

 

Support levels:

$1392 – 7/8 low

$1386-87 – double bottom, 7/5 and 7/9 lows

$1385– 20-day moving average

$1382 -84 – triple bottom – lows 6/24, 7/1, and 7/2

$1373-75 – double top – 7/6/16 and 7/11/16 highs

$1365-67– triple top – 8/2/16, 1/25/18 and 4/11/18 highs

$1358 – 6/20 low

$1353-56 – quadruple top – 4/12/18, 4/18/18, 4/19/18, and 6/18 highs

$1352 -  50% retracement of up move from 5/2 $1266 low to 6/25 $1439 high

$1348 – down trendline from 8/25/13 $1433 high

$1344-48 – 6 tops , 2/20 and  4/20/18, 6/5, 6/7, 6/13, and 6/17 highs

$1344 - 40-day moving average

$1342 – double top - 2/19 and 2/21 highs

$1338 – double bottom -6/14 and 6/18 lows

$1338 - 40 – triple top – 6/6, 6/10 and 6/12 highs

$1332-33 – double bottom – 6/13 and 6/17 lows

$1332 – 50-day moving average

$1327-30 – triple top, 6/3, 6/4, and 6/11 highs

$1325 – options

$1325-26 – triple bottom – 6/5, 6/10, and 6/12  lows

$1324 – double bottom 6/4 and 6/11 lows

$1316– 100-day moving average

$1309-12 - triple top – 3/28, 4/10 and 4/11 highs

$1301 – double top 5/13 and 5/15 highs

$1300 – psychological level, options

$1300 – 50% retracement of up move from 8/16/18 $1160 low to 6/25 $1439 high

$1289 – double top - 5/17 and 5/30  highs

*$1289 – up trendline from 8/16/18 $1160 low

$1285-87 – 5 tops – 5/23, 5/24, 5/27, 5/28, and 5/29 highs

$1285– down trendline from 2/20 $1347 high

*$1285 – 200-day moving average

$1279 – 5/29 low

$1276 – 5/28 low

$1275 – options

$1274-75 – double bottom  – 5/17 and 5/20 lows

$1273 – 5/22 low

$1269-70– triple bottom - 4/24, 5/3, and 5/21 low

$1265-67 – 5 bottoms - 12/25, 12/26, 12/27, 4/23, and 5/2  lows

$1259 – 12/24 low

$1254 – 12/21 low

$1250 – options

$1242-43 – double bottom – 12/19 and 12/20 lows