The trading day started with digesting the news of the departure of Trump's economic advisor Gary Cohn, stepping down from his post last night. Gold opened above yesterday's close on safe haven demand as the spooked equity markets opened lower on trade war fears amid the turmoil in the economic advisor post. Gold initially started trading upwards after the open, this was not to last as going into the afternoon the yellow gold gave back these profits and moved into negative territory partially wiping out the gains from yesterday. Wall Street saw a friend in Cohn and his stepping down gave them a slight pause, but it seems as if traders took the early downturn in equities to buy the dip and pushed equities back up off the lows into afternoon trading. The ADP employment report came out this morning showing a 235k increase, above expectations and above the same period last year. The markets will now look to the jobs report Friday to see if there is a consistent story. The positive economic releases have helped support the U.S. Dollar in spite of a possible looming trade war over tariffs, which in turn provided resistance to gold. Gold settled right at its 20 day moving average, just above both the 10 and 50 day moving averages giving short term support at these levels.
Platinum and Palladium are facing downward pressure on weak U.S. auto sales and more possible demand issues with the steel and aluminum tariffs which could further dampen domestic auto sales. The other metals fell in a similar fashion as gold as May silver futuressettled down to $16.494 a troy ounce, April platinum futures dropped to $953.20 a troy ounce, May copper futures settled down to $3.136 per pound, and June Palladium futures fell to $959.05 a troy ounce.
Following are your April gold pivot points. For April gold, an open in the next session above the pivot of $1,333.33 would show near term resistance at $1,336.27 while a breakout above this level would see longer term resistance at $1,344.93. An open below the pivot would have near term support down at $1,324.67, and a sell off below this would show longer term support at $1,321.73.
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Michael Bullion, CAIA
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Walsh Trading, Inc.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.