Gold, Silver Prices Hold Ground Ahead of Inflation Data
Michele Schneider | Aug 07, 2023 03:19AM ET
Last week was a very heavy week filled with all kinds of data:
- Fitch Downgrade
- Earnings: Amazon.com Inc (NASDAQ:AMZN) up Apple (NASDAQ:AAPL) down
- Jobs Report-Wages rising
- Treasury Yields higher-at October 2022 highs
- Record temperatures around the globe-including winter in S. America
- Oil prices rise 6 weeks in a row
The metals are holding their ground. The first chart shows gold in contango.
That is when the futures price of a commodity is higher than the spot price.
Contango occurs when an asset's price is expected to rise over time.
Gold spot futures closed right around $1957 per ounce.
The GLD (NYSE:GLD) ETF chart shows it in a caution phase under the 50-DMA.
The leadership indicator shows GLD slightly outperforming the SPY or benchmark. SPY closed down on the week from $456.92 down to $447, or about 2.2% lower.
Gold closed down from $181.86 to $180.20, or about 1.1% lower. Stronger than the SPY on a percentage basis.
GLD’s momentum on the Real Motion indicator turned up some, yet remains in a bearish divergence to price.
SPY’s momentum also fell and sits just below the 50-DMA (the first time it broke that momentum line since March), while the price is above that is a bearish divergence in momentum.
The point is that if SPY falters more from here and GLD rises, this will confirm the first indication of risk-off, something to watch for the coming week.
Silver is still underperforming gold and is also in contango.
Silver futures closed under the 50-daily moving average but over the 200-DMA. $23.50-24.00 gives us a good range to start from this week.
Get The News You Want
Above $24, and we would be encouraged to think silver has more upside. And in the case of the next chart:
We would think that iShares Silver Trust (NYSE:SLV) could gain leadership against gold, which right now on the leadership indicator has it underperforming.
If this is the case, it would have a positive impact on both metals and could indicate an increase in inflation.
SLV, the ETF like the silver futures, closed under the 50-DMA and is in a warning phase.
The momentum indicator has silver waning in momentum, so the decision on the next price move for silver could be evident as quickly as this week.
h2 ETF Summary/h2- S&P 500 (SPY) 450 pivotal 440 support at the 50-DMA
- Russell 2000 (IWM) 191 is the 23-month holy grail 193 July 6-month range hi
- Dow (DIA) 35,000 support
- Nasdaq (QQQ) 365-380 range
- Regional banks (KRE) Back over 48 looks ok and under 44 not so much
- Semiconductors (SMH) 161 now more in the rear view-150 in focus
- Transportation (IYT) July 6-month calendar range high at 259.30-closed below it-caution
- Biotechnology (IBB) Compression between 123-130
- Retail (XRT) 66-67.40 short-term range
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.