On Wednesday evening President Trump became the third U.S. president in history to be impeached. This process was run by the House of representative which contains a majority of Democrats. They approved abuse of power and obstruction of Congress as their two primary charges waged against President Trump.
Only three United States presidents in history; Andrew Jonson and Bill Clinton were impeached in the house but in both cases the presidents were acquitted by the United States Senate and not removed from office. Much of the same is expected on the third impeachment in U.S. history. While it was highly believed that the House of Representatives would be able to move forward with the process of impeachment, it is highly improbable that the outcome for the current administration will be any different than his predecessors.
The U.S. Senate is controlled by the Republican Party and as such will most likely not move forward to finalize the process. That has been cited as one of the primary reasons that market participants and investors trading U.S. equities have largely disregarded this process. And according to many analysts most likely that perception will not change unless the market sentiment completely shifts from the current belief that Trump will remain in office. Based on current market sentiment U.S. equities continue to stage I of the most dramatic rallies in history. Today the Dow Jones industrial average has gained approximately ½ a percent, a total of hundred and 37 points taking that into see two 28,376.68, the Standard & Poor’s 510 a net gain today of .48%, while the NASDAQ composite gained .67%.
The same cannot be said for the precious metals that are all tracking higher today. According to MarketWatch “Gold futures marked their highest settlement in more than two weeks on Thursday in the wake of President Donald Trump’s impeachment by the U.S. House of Representatives”.
Although precious metals traders have the same market perception about whether or not President Trump will get impeached, still yet it has certainly ratcheted up the uncertainty level which is a precursor to bullish sentiment in gold and silver.
Gold traded to its highest level in the last two weeks, gaining four dollars basis the most active February contract which is currently fixed at $1482.70.
On a technical basis this marks the first time since November 4th when gold pricing closed just above the 50-day moving average, although it traded lower on the day. The following day gold opened above the 50-day moving average at $1511 before selling off strongly and closing at $1483.70. Currently the 50-day moving average is fixed at $1480.80, and is approximately two dollars below gold’s current fixed price of 1482.70.
That being said for true technical confirmation traders are looking to see whether or not gold can close above 23% Fibonacci retracement which is currently fixed at $1497 per ounce just one dollar away from the 100-day moving average below it at $1493.30.
While it is still a bit early to be able to say there is technical confirmation that a rally is about to resume, these are exactly the technical indicators we would expect to see if the market sentiment was shifting back to bullish from bearish and price points we need to see for that process to complete.
Courtesy - Kitco.com