long-term outlook for gold is extremely bullish, but at any point we could see a correction take place. The fact that gold futures traded to a new yearly high and then closed lower on the day indicates that there are traders pulling profits from recent gains.
Of all the precious metals traded in the futures complex (gold, silver, palladium and platinum) gold was the only one trading lower on the day.
Gold trades to its highest level of 2020, and then closes lower on the day
Although gold futures hit a new yearly high of $1788.60 in trading today, as of 4:48 PM EST gold futures are currently down by $5.40 and fixed at $1755.90. The lower pricing is occurring during a day of dollar weakness, with the U.S. dollar index currently down almost 0.49% and fixed at 98.85.
Currently there is approximately a $30 differential between spot and futures pricing. This spread was his wide as $60, however today's moderate gain in spot pricing in conjunction with gold futures fractional decline that spread has narrowed by approximately $18.
That being said gold has increased in value by almost 20% this year alone, and continues to be acting as a safe haven asset class should. Recent action by the Federal Reserve continues to weigh heavily on market sentiment as Fed cut rates to nearly zero, and reignited their monetary policy of quantitative easing.
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According to MarketWatch, "Ryan Giannotto, director of research at GraniteShares, which offers a Gold Trust, said the "primary factor at work in the gold market" is the U.S. Federal Reserve's expanded lending and asset purchasing program announced last week."
He also said that "This latest facility on behalf of the Fed, not only allows the central bank to purchase junk bonds, but it is the largest money printing event in human history. These developments catalyzed gold's close above $1,700, and the metal is rallying further."
Another interesting aspect is that of all the precious metals traded in the futures complex (gold, silver, palladium and platinum) gold is the only precious metal to be trading lower on the day. Platinum gained over 9% in trading today, and after factoring in today's gain of $69.90 is currently fixed at $1819.40. Silver gained a respectable 3.27%, with May silver futures closing above $16 ($16.045) per ounce after factoring in today's gain of almost $0.51. Palladium gained 1.22%, a $26.40 gain, and remains the highest priced precious metal traded on the futures exchange. Palladium is currently fixed at $2197.10.
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On a technical basis the new level of resistance is today's high at $1788.80, with support at $1739, which is the 23% Fibonacci retracement of the most recent leg of this rally…
See the whole story on Kitco here: https://www.kitco.com/commentaries/2020-04-14/Gold-trades-to-its-highest-level-of-2020-and-then-closes-lower-on-the-day.html
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