Gold Traders’ Report - June 26, 2019

Jim Pogoda, Senior Gold Trader, Gold Bullion International 
JUN 26, 2019

Gold softened last night, sliding in a range of $1402.30 - $1412.15. Stops were hit under $1412 (yesterday’s low, and Friday’s high), which tripped some profit taking from longs and helped accelerate the selling down to support ahead of Monday’s $1402 low.  Gold faded a bounce in the US 10-year bond yield (1.992% - 2.028%) and some strength in the US dollar (DX from 96.15 – 96.32).  The dollar was lifted by a retreat in the safe haven yen (107.10 – 107.75), and a softer pound ($1.2693 - $1.2662, BOE’s Carney said they may cut rates in case of no-deal Brexit, Johnson says 10/31 is “do or die”) and euro ($1.1372 - $1.1351, miss on German GfK Survey).  A rally in equities during European time (European shares up from 0.1% to 0.5%, S&P futures +0.5%) off of upbeat comments on US –China trade from Treasury Secretary Mnuchin (“We were about 90% of the way there [with a deal] and I think there’s a path to complete this”) was also a headwind for gold.  Firmer oil (WTI from $57.80 - $59.13) from a larger than expected draw in US oil and gasoline inventories aided the advance in stocks. 

At 8:30 AM, a weaker than expected reading on US Durable Goods (-1.3% vs. exp. -0.1%) combined with a comment from Trump that Google and Facebook should be sued over bias allegations knocked S&P futures lower (2927), and took the 10-year bond yield down to 2.007%.  The DX edged down to 96.23, and gold advanced to $1412 – where resistance held. 

US stocks opened firmer (S&P +15 to 2932), with Mnuchin’s positive outlook on the US-China trade negotiations still resonating and with the IT and Energy sectors pacing the advance.  The US 10-year yield bounced to 2.021%, and the DX took out its overnight high to reach 96.35.  Gold weakened in response, and slid to $1403, where support emerged ahead of the overnight low.

US stocks softened into the late morning hours (S&P +3 to 2920), despite a further advance in oil (WTI to $59.90, 1-month high, EIA reports much larger than expected draw in US oil inventories).  The 10-year yield kept climbing, however, reaching 2.036%.  The DX was caught in the cross currents but traded down, and took out its overnight low to reach 96.11.  Gold advanced off of the weaker greenback, but ran into resistance again at $1412. 

Into the afternoon, the S&P traded narrowly sideways (2920 – 2926), holding on to its modest gain.  The US 10-year yield edged higher to 2.038%, but the DX softened further to 96.06.  Gold was able to take out resistance at $1412, and traded up to $1415.  

Open interest was off 6.3k contracts, showing a net of long liquidation from yesterday.  Volume exploded with 667k 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), oil prices, and will turn to reports tomorrow on Japan’s Retail Sales, China’s Industrial Profits, Eurozone Confidence, Germany’s CPI, US GDP, Personal Consumption, Core PCE, Jobless Claims, Pending Home Sales, and the Kansas City Fed Manufacturing Index for near term direction.  


In the news:

ECB gives cautious green light to League’s bill on Bank of Italy gold reserves:   https://www.reuters.com/article/us-italy-cenbank-ecb/ecb-gives-cautious-green-light-to-leagues-bill-on-bank-of-italy-gold-reserves-idUSKCN1TQ2JR

Goldman updates gold forecasts:   https://www.forexlive.com/news/!/goldman-sachs-update-their-gold-price-forecasts-3-6-and-12-months-20190625

India’s gold demand could fall to three-year low as prices hit record high:   https://www.livemint.com/

ML caught manipulating precious metals market:   https://www.zerohedge.com/news/2019-06-25/merrill-lynch-caught-criminally-manipulating-precious-metals-market-thousands-times

 

YTD Performance


12/31/2018

6/26/2019

Change
% Change
Gold


1282.5

1413

130.5

10.175%

DX


96.06

96.17

0.11

0.115%

S&P


2505

2920

415

16.567%

JYN


109.63

107.73

-1.9

-1.733%

Euro


1.1466

1.1375

-0.0091

-0.794%

US 10-year bond yield


2.69%

2.038%

-0.0065

-24.125%

Oil (WTI)


45.45

59.44

13.99

30.781%

 

Resistance levels: 

$1422 – 6/26 high

$1425 – options

$1434 – 8/25/13 high

$1439 – 6.25 high

$1446 – 5/12/13 high

$1450 – options

$1479 – 5/5/13 high

Support levels:

$1420 – 6/24 high

$1416 – 9/1/13 high

$1412 – 6/25 low

$1412 – 6/21 high

$1401 –$1402 6/24 and 6/26 lows

$1400 – options

$1392-93 – double top - 9/8/13, 6/20 highs

$1388-89 - double top, 3/9/14 and 3/16/14

$1383 – 6/21 low

$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

$1365- up trendline from 5/30 $1275 low

$1358 – 6/20 low

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

$1351– 20-day moving average

$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

$1343 -  50% retracement of up move from 5/2 $1266 low to 6/24 $1420 high

$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

$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

$1317 - 40-day moving average

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

$1309 – 50-day moving average

$1307– 100-day moving average

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

$1300 – psychological level, options

$1290 – 50% retracement of up move from 8/16/18 $1160 low to 6/24 $1420 high

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

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

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

*$1282 – up trendline from 8/16/18 $1160 low

$1279 – 5/29 low

$1276 – 5/28 low

*$1276 – 200-day moving average

$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