Since our last update markets have traded lower, as market sentiment shifts away from fear of a global trade war. With the news over the weekend that the US and China came to an agreement to pause tariffs for a 90-day period as they work through trade talks, precious metals took it on the chin. The Friday before the announcement Gold closed over $3,300 and on Sunday nights open gold opened sub $3,300 and then continued to drop. As investors sighed a sighed a sigh of relief they began to take some money off the table with precious metals. As we’ve been stating over the past few market updates, this market is very sensitive to any trade news. If there is any breakdown in negotiations, you can expect this market to head back toward $3,500. We are currently trading under $3,200 on gold which I didn’t expect to happen if im quite honest. On the initial drop on Monday gold tested down to about the $3207 level which held and then worked its way up to $3247 where it kinda just hobbled back and forth. I am now currently watching the $3200 level like a hawk, if we can take back that level and close above the $3207 the bulls might be able to take the momentum back and push this market higher. After the drop yesterday of over $100 a bounce back was expected, now we need to see what trade news comes out or what technical levels can be held or taken out to provide us with further indication of where this market will head.
On silver I continue to eye the ratio which at 100:1 seems to be the new norm, when historically its been more 60-80:1. As silver has been undervalued this whole time, with the news its dropped even further touching as low as $31.65ish, which presented a good buying opportunity for some. Silver now is trading at around $32.32 and if momentum on gold can strike up, a $33 silver is in the cards. It appears at the $32.40 level there is some resistance, if we can make it over this level, we should see $32.75 then $33. Overall the market is down, but with the way things are going with the US economy, the war in the middle east and between Russia and Ukraine, this drop is a buying opportunity and not a selling one if you ask me.
Josh Perez
Managing Director
Chief of Global Trading