Gold Futures Hit $1798.40 and Closed Up Over $15.00

Currently gold futures are fixed at $1794.30 that is a net gain of +0.89%. Although it has not challenged $1800 per ounce that would be the next target we would want to see gold futures close above.

Silver also made a solid upside move today gaining over 3% (+3.10%) a $0.80 gain. Currently silver futures basis the most active May 2021 contract is fixed at $26.64.

On a technical basis both gold and silver have broken above former resistance as they have effectively traded and closed above their 50-day moving averages. In the case of silver futures, the current fix of the 50-day moving average is $26.082. Silver’s longer-term moving averages such as the 200-day, and the 100-day have remained in bullish alignment with the short-term 50-day moving, average above the 100-day moving average, which is above the 200-day moving average.

In the case of gold futures, the June contract traded above its 50-day moving average on Thursday of last week when market forces resulted in a $28 gain. However, the longer-term moving averages remain in a bearish formation in that the highest moving average is the 200-day. Below the 200-day at $1858.10, is the 100-day at $1802.60.

If gold continues its upward trajectory, it should be able to close above $1800 as well as its 100-day MA which as we mentioned is just above $1800 per ounce.

According to many analysts this recent uptick is a flip back to the safe-haven asset class as concerns about rising Covid-19 infections in various countries has created a growing sense of uneasiness.

As reported by MarketWatch, Lukman Otunuga, senior research analyst at FXTM, told them that, “A growing sense of unease over the surging COVID-19 cases in Asia has hit risk sentiment and left investors on edge. With concerns likely to rise over how this may impact the world’s economic rebound from COVID-19, gold has the potential to push higher as risk-off makes a return.”

According to the Associated Press one of the real hotspots continues to be India. Currently India has the “second-highest number of cases at 15.6 million, and is the fourth globally by deaths with 182,553 deaths reported due to the virus. India reported today a record number of cases coming in over 200,000 for the seventh consecutive day.

The United States continues to lead the world in terms of active cases of the virus with 31 point million cases, or more than 20% of the global total which is 564,475 deaths.”

Today there were mild tailwinds from a lower U.S. dollar. Currently the dollar index is fixed at 91.07, after factoring in today’s decline of -0.17%. Additionally, the 10-year Treasury note has been stable currently fixed at approximately 1.56%.22

These factors mentioned above collectively could continue to be highly supportive of the safe haven asset class, taking both gold and silver to higher pricing over this next week and beyond.

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Wishing you, as always, good trading and good health,

Gary Wagner