Gold/Silver: Three reasons the low is in

Gold has done a terrific job ignoring the Bond fallout not only this week but again today. The Federal Reserve announced they would not extend the Treasury exemption on SLR for banks, and Treasuries continue to see fresh lows. The rise in yields has paved a path lower for Gold in recent months, but going back to last Friday, Gold reversed overnight losses despite Bonds forging new lows. Through this week, the Bonds continued lower, yet Gold is up about 1%. There are a couple of reasons we believe this is taking place.

First, all the sellers have already sold, who is left to sell; we are looking forward to today's Commitment of Traders. Second, there are rising geopolitical tensions, and Gold is finally acting like a safe-haven. Lastly, many investors believe there is a 2% ceiling to the 10-year, and it is close enough to reason with buying Gold 15-20% from its August record. There's no better technical indicator than a fundamental rejection. If you would like to be up to date on the developments of our specific strategies in the futures and commodities markets, please register for a Free two-week trial by clicking on the link here: The Blue Line Express Two-Week Free Trial Sign up.

Technicals: Gold stabilized yesterday against major three-star support at 1719.8-1723.3, and this reinvited out cautiously Bullish Bias. Our momentum indicator now aligns with major three-star resistance at 1727.5-1732.9, a level Gold did not close above yesterday. Overall, a positive session today will exude broader, longer-term strength. Silver has also struggled at major three-star resistance at 25.97-26.23, a level that aligns with our momentum indicator this morning. Similarly, we want to see a positive move today to exude strength in the face of outside markets lower; Bonds, stocks, Platinum, Palladium, and Crude. We created a guide that will provide you with all the Technical analysis steps to create an actionable plan used as a foundation for entering and exiting the market. You can request yours here: 5-Step Technical Analysis Guide to Gold.

Good luck and good trading,

Phillip Streible

Chief Market Strategist


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