U.S. gold fell again on Friday, turning the tide on gains. The metal’s fall was modest, however. Silver's move higher was lackluster. Gold fell $3.60, or 0.25%, to close at $1,428.30 an ounce. Silver futures price for June delivery, now the most active contract, rose $0.14, or 0.37%, to close at $37.78 an ounce on the Comex in New York. Silver prices hit an intraday low of $37.06 and a high of $37.82. Both gold and silver are within striking distance of all-time and 31-year highs.
In my opinion, this week silver will make yet another 31-year high, extending its gains beyond $38.18 an ounce. I recommend getting long either gold and/or silver. I would consider buying April 37-38 SLV bull call spread.
The U.S. dollar was modestly lower. The U.S. dollar index was down 0.02, or 0.03%, to close at 75.83. The U.S. dollar index hit an intraday low of 75.79 and a high of 76.61. The U.S. dollar index failed to cross the middle band of bollinger bands and closed below the seven-day moving average. This does not bode well for the U.S. dollar. Traders see more weakness in the U.S. dollar in coming trading sessions.
I think, UUP, the PowerShares USD index, will come under pressure in coming days. I recommend either staying on the sidelines or getting short exposure to UUP.
U.S. stocks started the month with decent gains on Friday with the Dow Jones industrial average up 56.99 points, or 0.46%, to end the day at 12,376.72. The S&P 500 Index gained 6.58 points, or 0.50%, to finish the day at 1,332.41. Nasdaq was up 8.53 points, or 0.31%, to close at 2,789.60.
In the coming week, I will not be surprised to see the U.S. equities market taking a breather. Commodities, on the other hand, are anticipated to continue to climb. Precious metals are expected to lead the charts. The best risk/reward ratio is presented by getting long silver via SLV (iShares Silver Trust).
Disclosure: I am long SLV.
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