Bill Poulos is the president and co-founder of Profits Run. The company creates programs, like Premium Income Alert to help investors. Here, Bill updates us on the commodities market during the Covid-19 pandemic.
GOLD
Gold had a pretty good week. Gold opened at $1742, pushed up hard on Monday and Tuesday and then hit a wall about $1770 with strong resistance at that level. This is going to be the battle next week, can gold push through this resistance to set even higher highs as the overall stock market has been showing some signs of weakness this week. As gold has rallied over the last couple of months, we are looking at moving into record territory. If the Gold market can continue to move higher the area between $1800 and $1900 per oz, has only traded that high 10 years ago in 2010. After a big upward push like we have seen, it is not unusual for there to be a pullback lower back to support before moving higher. This support level at about $1740 is a significant support from old resistance going back several months to April.
SILVER
Silver traded between $17.50 and $18 this week, pretty much consolidating with a whole bunch of uncertainty surrounding the economy openings potentially slowing down due to the rise in Covid-19 cases around the country. If the economic openings around the country slow down, this can have a big impact on industrial demand for silver, a huge driving force behind silver prices. So, until we have more information about the ongoing pandemic silver has been in a sideways consolidation. If the Covid cases slow down or moderate, and the economies continue to open, demand for Silver should rise pushing prices above the $18 per oz resistance level. If the economic openings slow down, we could see demand fall and prices retreat to $17 support level. The next couple of weeks will be critical to understanding where this will go.
OIL
This week Oil moved down a bit, Oil opened the week at 39.42 per barrel and after the oil inventories report on Wednesday showed more inventory than predicted, the price fell back to about $38 per barrel and prices have been consolidating around $38 for the last several days. This will make the second weekly decline after the big rally since the $20 per barrel level set at the beginning of May. As the Covid cases have increased around the country the oil prices have lost some steam that was created by the anticipation of higher demand for oil as the economy opens further. So, the potential “second wave” or increase in cases has created additional uncertainty in the demand for oil and a couple of days of consolidation. Currently we have strong support at about $35 per barrel and strong resistance at about $40. Largely the ongoing pandemic effect on the economy will drive demand and oil prices over the next couple of months.