Gold and Silver Outlook 12-23-2014

Gold and Silver

Gold fell 0.2% today and silver rose 0.5%. Gold for the year is down 2% and silver down 19%. Next year we will finally be off to the races, but only after we hit some lower lows from my perspective.

JNUG started the day nicely up after the 1:10 reverse split but JDST took over later in the day and ended up while JNUG continued its trek down. I expect a choppy day in the metals tomorrow.

From the Trading Desk

With the shortened trading week due to the Christmas and Boxing Day holidays, volume on the electronic exchange for gold and silver is muted.  A combination of factors has weighed on the precious metals complex this week as it approaches year end.   Crude oil continues its slide lower, having lost 4.5% yesterday and a whopping 43% year to date.  Considering that it is the biggest market within commodities, as goes crude, often goes gold.   The release of US data today showed that the US economy grew by 5% in the third quarter versus the expected 4.3% consensus.  The US dollar is now trading at a five year high against a basket of currencies while the Dow Jones is making all time highs above 18,000.  Weak crude oil, a strong USD, and US equities making all time highs (yet again), do not paint a bullish picture for gold as the year winds to a close.

Gold crumbled below support at $1,183 yesterday and has spent most of today’s session trading sideways and below this $1,183 level.  Near term support is at $1,150 while rallies will be sold in the mid-$1,180s.  Silver is trading without conviction but has found bids recently above $15.50.

Natural Gas

UGAZ got a little bounce today of the $5 mark. No way to tell if we have bottomed yet but tomorrow we have another supply report that will surely move it one way or the other. Despite all the negative reports the last 4 weeks, all Natural Gas has done is go down. It’d due to move higher. The question is, will it? Whatever breaks to a new high, I would buy, whether it be DGAZ or UGAZ. Winter is coming soon and at some point Natural Gas will rebound.

Stocks Hit Record

TNA hit a higher high again today on a better than expected GDP report before giving much of it back. Yet TNA ended the day positive. I had speculated yesterday the numbers would be good and it sent the DOW over 18,000, a new record. We have had a nice run up into Christmas Eve tomorrow and I expect a slow choppy day tomorrow. I would probably take profits on TNA and come back after the Holiday and see if the play is TZA or TNA.

Oil

Oil got a little bounce today and USO ended up 3.06%. A new 3X leveraged ETF I am putting on the radar instead of UCO is UWTI which ended up 8.58% today. 52 week low is 5.11 and 52 week high is 43.99.

Russia

RUSL streak ended today with the 1:10 reverse split. It was a nice ride but lost close to 10% today. I had said yesterday that it was probably time to sell if it didn’t break to a higher high, but a lower low and it did.

Next report will be either Friday or Sunday.