Weekly Commodity Update: COVID Restrictions Lessening Help Gold and Silver
Gold opened the week at $1700.70 per oz and is headed for its first weekly gain in 4 weeks. After a bit of a rough start on Monday, Tuesday and Wednesday rocketed higher to find the Thursday and Friday a choppier and a bit negative coming off the weekly highs. Higher Government bond yields the last several weeks have been driving the U.S dollar higher and Gold and other precious metals lower. This has been going basically since the first of the year. This week yields moderated some and caused at least a minor reversal in the negative trend. Support held this week at about $1680 per oz. Currently trading late in the last session of the week is right around $1720 per oz. For now the best predictor of gold prices is the inverse relationship to the U.S bond yields, so watch for these to moderate or to continue higher in the short term.
Silver, like Gold is headed for a positive week, even though we are finishing up on a bit of a negative note. Silver opened up at $25.20 per oz, and held support at the $25 per oz Monday and Tuesday before moving higher as bond yields moderated. Silver ran up to a high of almost $26.50 before retreating later Thursday and into Friday. Late Friday trading is $25.85, well of the weekly lows but right between support and resistance. With the Covid restrictions looking to be opening up around the country, demand could push prices higher in spite of the higher bond yields. Much of the long term driving force of Silver is the industrial demand more than an investment hedge against inflation etc. We will see over the next several weeks if we can break out of the current consolidation.
Oil opened up the week at $66.26 per barrel and initially ran up to $68 on Monday setting a multiyear high for US Crude, before pulling back and closing lower on the day. While trading lower down to below $64 mid week, we are back up to the $65.80 level in late trading on Friday. So, while the week will close slightly below the open for a negative week, the week is ending on a positive note with reality that as demand recovers in the summer and if production remains the same, we could be looking at prices at or near $70 per barrel in the short run.
Bill Poulos holds a degree in engineering, an MBA in finance and has over 4 decades of trading experience. After retiring from his executive position at General Motors, Bill started Profits Run, LLC with his son Greg in 2001. Profits Run has the primary goal of helping everyday people learn how to invest with minimal risk. Bill has developed many products including 20/30 Wealth Trader, Crypto Profit Alert, Premium Income Alert, Rapid Income Engine,and Auto Income Engine. Bill lives in Michigan with his wife of over 50 years, Karen. Follow Bill for weekly updates on commodity trading and regular stock market analysis.