With all the volatility (mostly negative) in the equity markets this week, gold jumped to a multi- month high as a safe haven for investors, and then retreated some after the equity market started to recover a bit on Friday. Thursday saw the sharpest 1 day move up in gold for the last couple of years since June 2016. However, even with this dramatic move up on Thursday, gold is still down overall about 10% from the Peak back in April of this year.
The SPDR Gold Trust ETF (P:GLD (NYSE:GLD)) was trading at or around $112, which was working as a good support level and now is trading up above $115, which is very close to the 100-day moving average. This looks to be a good resistance level, if it closes higher than this level, we could see a move higher. If GLD trades back down to support to the $112 level, that would be another good entry for gold.
While the silver market this week was volatile, silver did not have quite the huge jump in reaction to the equity meltdown that Gold had, which is typical as silver is not as volatile as gold. However, it still had a nice move higher this week. Based on the iShares Silver Trust (NYSE:SLV) ETF the first part of the week was trading with lows down around $13.40. With the jump up on Thursday and Friday open we had a high of $13.82 which is still off last week’s high, and significantly lower than highs in April and June earlier this year.
Lower support is around the $13.20 to $13.40 range. It is important to see if silver trades back down to support from the week’s highs, if that support will hold or if silver will continue its downward trend.
The big news this week in the oil markets are that U.S Crude oil inventories jumped by 6 million barrels, according to the government data when the forecast was around 2 million barrels, a 4 million barrel increase from market expectations. At the same time, this week OPEC cut its forecast of global demand growth for oil over the next year. These two factors, slowing demand and rising inventories, put serious downward pressure on the price of oil with both Brent Crude and U.S. Crude dropping by more than $2 per barrel as a result, which is no surprise. Oil is still trading near the yearly highs. USO, the U.S. Oil ETF (NYSE:USO), is trading around $15.00 off of the year to date high of $16.24, set just last week. This is still much higher than the price at the beginning of the year around $12.00 per share.
Bottom line is that while oil prices fell this week. Although they are still trading near the yearly high, they have some room to fall if the overall demand weakens and supplies build or remain constant. Time will tell, but support for USO is around $14 per share, look for the that to hold there, or break lower.