After hitting five month highs, gold pared gains through the remainder of the week as some geo-political worries subsided. For the week gold settled just .60 cents higher with the June futures contract settling at 1289.1. Silver saw significant weakness settling below 18.00 for the first time in three weeks. Coming into the week, the long position in Silver reached a record of almost 180K contracts. After reaching a high of 1865 early in the week, silver bulls ran for cover amid profit taking and an over bought technical situation.
May silver futures settled at 1785. Gold for the most part held together and didn’t see a major percentage drawdown merely trading down to initial support at 1275.4. Geo-political fears are still in the market but the event traders will be watching will be the first round of the French Presidential election. The market is concerned that a win by the populist candidate Marine LePen; who is seen as a populist and potentially favors France leaving the EU similarly like England last year, could have damaging effects to global equity markets. This in turn could cause a rush again into metals amid the safe haven trade.
It is important to note that this weekend’s election is only a primary with the general election coming May 7th. There will be a full docket of U.S. economic releases next week highlighted by consumer confidence and new home sales on Tuesday. Later in the week durable goods and first quarter GDP will be released. Across the pond aside from the French Primary results, the ECB will meet Thursday on a policy announcement however rates are likely to remain unchanged there. Simply put gold and silver will need to be Fed bullish news going forward as equities bounced later in the week off of overall positive earnings results.
Technical’s come in as follows for next week. For June Gold Support is down at 1277.2 and then below there at the 200 day moving average at 1266.5. Resistance is at 1299.2 and then up at 1309.3. For May silver support is seen first at 1754.1 and then down at 1722.8. Resistance is up at 1841.1 and then up at 1896.8.