The gold market continued its slide Tuesday trading down to its lowest level in two weeks, briefly trading below the 200 day moving average at 1265.4 an ounce before settling just above it at 1267.1. June gold futures are down $22.00 for the week so far as a furious rally in the stock market has erupted. Investors breathed a sigh of relief early this week after the first round of the French presidential elections on Sunday determined the centrist candidate Emmanuel Macron and nationalist candidate Marine LePen will square off in the run-off election on May 7. However, LePen fared worse than many expected Sunday and Macron is now projected by early polls to be the decisive winner of the May 7 vote.
Macron’s impending election has signaled to the market that France will remain in the E.U. and not follow Britain’s exit. Amid strong earnings results this week and renewed talk of corporate tax cuts from the Trump administration, investors are pouring back into the stock market with vigor as the risk on sentiment re-emerges. If there was any doubt concerning investor sentiment on the stock market the VIX index, which measures stock market volatility, dropped by 26% on Monday, which is the largest one-day drop in six years. The market has similarly brushed aside geo-political concerns this week and therefore gold and silver have fallen. June gold needs to hold and settle above the 200 day moving average at 1266, or suffer further declines most likely down at the 50 day moving average at 1248.6.
Daily Swing numbers for June gold and May silver
June Gold (4/26/17) May Silver (4/26/17)
R2-1297.0 R2-1814.6
R1-1276.6 R1-1786.8
Pivot-1269.7 Pivot-1769.6
S1-1259.6 S1-1741.8
S2-1252.6 S2-1724.6