With Tight Ranges, Investors Should Look To “Buy The Dip” On Gold And Silver – by Bill Poulos
GOLD
Gold traded in a relatively tight range this week, opening at $1292 per oz and $1285 for most of the week. It had a quick drop on Thursday down to the significant support level around the $1280 level. Currently, late on Friday, we are right back to where the week started trading right around $1292. Again, the massive support level of $1285 was tested and would not budge. In fact, these bounces off the support around the $1285 level are excellent short-term buying opportunities as the market just doesn’t want to go below this level. For this reason, there are plenty of buyers willing to jump in at this level. For technical traders this is right at the 200-day exponential moving average. Today the Non-Farm payroll numbers were released which came out better than expected and pushed the U.S dollar higher which influences Gold. In the end the price stabilized and is trading right back where it started on Friday at around $1292 per oz. If next week we do get a drop down to the $1285 level and closes below $1275, we could see a continued drop down between, $1250 and $1225 per oz.
SILVER
Silver, like Gold, has been a fairly tight range all week, trading between $15.20 per oz on the high side to just below $15.00 on the low side. Currently trading late on Friday, Silver is trading in that range at about $15.10. The intraday lows have been reaching just below $15.00 and that level seems to bring in enough buyers to push the prices up a bit and create a bounce. Therefore, these pullbacks to $15.00 are providing good opportunities to “buy the dips” as the market remains volatile but positive. If we see a break below around $14.90, we could see some negative bias enter the market and push the prices down to around bottom support of $14.50 per oz. At present time, the positive bias could and should push the prices up to around $15.35 or so.
OIL
This week Oil continues to push higher starting just above $60 per barrel, up to a high above $63 per barrel in late trading Friday afternoon. However, there are still concerns about slowing global economic demand and increasing production in the U.S and elsewhere, that could but a lid on the price increases to around $65 per barrel and then even falling to back to $62 in the next year or two if the slowdown materializes and persists. However, for the near term the price support or floor seems to be around the $60 per barrel level, which make this level a good place to look for buying opportunities as the market is still very bullish up to the $65 level.