The women I know love clothes and gold and I think both at least at the wholesale level will be going on sale in the very near future. Cotton prices have been?dancing?the up-sloping?trend?line for the past 6?months as?seen on the chart?below. Current prices have July futures higher ?by 19% off?their?December?lows. As of?this?post futures are lower by 1.38% in today’s?session?and challenging the up-sloping white trend line. I am?thinking?we break the trend line in the coming sessions and at a minimum we?see a retracement to the 38.2% Fibonacci level near 88?cents.?
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For now bulls?remain?in the driver’s seat but momentum appears to be?turning. Export sales are?rumored?to be?light this week so I think?some?longs are booking profits ahead of that #?tomorrow?and also?we?have a a USDA report on Friday. Open interest remains high ?(highest?level since Nov. 13) which?leads me to?believe?if and when we turn if the longs puke that COULD accentuate the?move?lower.?
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Cotton:
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June gold futures?failed?just shy of the 50 day MA (light blue line) this week and as of?this?post prices are off?by 1.44% today breaking the 200 day MA (red line). In?weeks?past buying has supported on trade?below?$1275 but could this time be different??Being?I do expect the US?dollar?to?track?higher from current trade and there seems to be no concern about?inflation?at least in the short run I think the path of?least?resistance will be lower. I?anticipate?that once $1270 is breached futures make a run at their lows from?late 2013 near $1200/ounce.?
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The fact that the recent South African supply side threats did not spill over and result in any upside spike should be?disconcerting?for the the gold bulls in my opinion. Violence in the Ukraine which?should?also?be?supportive?and has not resulted in any bullish action. When what should be a bullish impact and?markets do not respond as a trader I think you should take the other side of the trade…this has?been?my?experience.?
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Gold:
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The sale may not happen in time for Mother days but I do think that we see lower wholesale prices in both cotton and gold in the coming weeks.?
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