Futures Commentary and Analysis


Weekly Gold Report
Sean Lusk - IF - Fri May 19, 3:38PM CDT

Junegold and July silver futures posted solid gains this weekas political headlines stole theshow across the commodity sector. For the week June gold settled at 1253.6, up $25.90 for the week while July silver settled at 16.795 to finish 39 cents for the week. Reports from the New York Times and Washington Post detailing potential interference from the President involving the investigation of former National Security advisor Flynn by the FBI over Russian ties created safe haven buying in the metals this week. As a result equities were pounded this week as well as the greenback as there was a lotof noise in the market concerning a potential impeachment of the President that could be in the offing. Recent liquidations of long positions in both gold and silver ceased this week as open interest in gold and silver increased as new longs re-entered into the market on safe haven buying. After settling above key moving averages at mid-week, gold was unable to see any technical follow through and ended the week settling below the key 200 day moving average at 1255.0 basis June futures. The market has become headline driven due to the political chaos in Washington as technicals for now have taken a back seat to headlines and noise. This was no more evident when Gold settled above the 50, 100, and 200 day moving averages onWednesday along with technical areas of weeklyresistance. However as stocks recovered off of a story that former FBI Director Comey in prior congressional testimony revealed that there had been no pressure from the White House on any investigation on Russian ties to anyone in the President's inner circle, stocks summarily resumed their uptrend and the safe haven buying that ignited gold and silver higher subsided. Its my purview that the investment community going forward will view any further dips in metals as a buying opportunity even though the probability ofa June rate hike still seems priced in for now. Weakness in the Dollar and the never ending headlines that continue to dog the Trump administration should keep a floor onmetalsprices for the time being.

Heading into next week investors will be watching the release of the FOMC minutes from their last meeting on Wednesday afternoon and the potential testimony of former FBI Director Comey in front off the House Oversight Committee. Economic data is highlighted by home sales, manufacturing data, and the second reading of first quarter GDP. Technical weekly swing numbers come in as follows for both June gold and July silver. Support for June gold comes in at 1232.0, and with a close under 1210.3 is next. Resistance is up at 1270.2 and with a close over 1286.7 is next. For July silver, support is down at 1645.7 and with a close under 1612.1 is next . Resistance is up at 1708.2 and with a close over 1737.1 is the next level to the upside.

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Sean Lusk

Director Commercial Hedging Division

Walsh Trading

312 957 8103

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