As we are writing this report gold is trading at $1277 however the white metal is currently trading around $14.40(we have entered in our silver position at $15 last week). Currently, we hold three positions in our portfolio in which two of them dedicated to the yellow metal((we have entered in our gold long term position at $1245 however the remaining one belongs to silver . Please, note-we have already moved our stop loss to $1310 for our short term gold trade last week however once our short term position will be more favorable we will trail our stop loss accordingly.
A strong rebound which we have witnessed in the U.S. equity market this week which helped to grow trader and investor risk appetite was the major short term catalyst behind the precious metal sector fall. The firmer DXY has also proved to be for the sector. The uncertainty regarding the U.S-China trade war is still maintained in the market place. The U.S-China finalizing deal has been the center of attention for the market participants from months however the ongoing indecision and uncertainty regarding the matter has been very confusing for traders and investors. Despite the trade war front today's U.S. economic data which included a solid rise in home sales, outstanding reading from the Philadelphia Fed business survey and the severe reduction in the weekly jobless claims helped U.S. dollar index to move substantially higher which eventually drag the gold price 15 dollars lower.
That's quite a big news that despite the U.S. government increased tariff on $200 billion of Chinese imports with 25 %, the market didn't react to this new development at all. That shows a heavy disappointment for the precious metal bulls and favors our existing positions. To be precise the yellow metal should have reached around $1310 or even higher on this news, Gold managed to surge only $20 even when equities drop more and reached their six-week lows. what does it indicate? obviously not a sign of bullishness.
we have already emphasized in our previous report about the possible DXY higher prices. our comments based on our previous report doesn't need any correction. Based on our research The US dollar index continues to suggest that there is much more room left for prices to move higher from the current level. The DXY fell 0.5% last week due to a more imposed tariff on China by trump. The euro rose 0.3%, however, the pound fell 1.3%. The downward movement which we have witnessed in the U.S dollar index was merely a correction within the context of the rise.
our current bias-The bears are in the full control and have the overall technical advantage in gold and silver market ,overall we believe the boring price movement which we have witnessed from weeks in the precious metal sector has already ended and the serious technical damage in P. Ms charts has already inflicted however the next breakdown could be more severe enough.