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Technical Forecasts

This is a discussion on Technical Forecasts within the Trading Systems forums, part of the Trading Forum category; The U.S. Comex gold futures dropped 1.49 percent in the past two days while the S&P 500 index jumped 1.54 ...

          
   
  1. #101
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    Will the Fed Calm or Ignite More Fear for the Gold Investors?

    The U.S. Comex gold futures dropped 1.49 percent in the past two days while the S&P 500 index jumped 1.54 percent and the Euro Stoxx 50 Index rose 1.26 percent. At 2.185 percent, the U.S. 10-year government bond yield is trading only 5 basis points below its recent high of 2.23 percent. Year-to-date, the gold futures have corrected 18.43 percent to $1,367 while the CRB Commodities Index dropped 2.91 percent and the Dollar Index rose 1.06 percent.

    Data before the Fed Meeting

    The U.S. CPI rose 0.1 percent in May compared to the expected 0.2 percent. Year-on-year, the CPI rose 1.4 percent compared to 1.1 percent in April. The core inflation rate rose 0.2 percent as expected. An inflation rate of lower than two percent gives the Fed more room to continue with the monetary stimulus. The May U.S. housing starts also rose less than forecasted at a yearly rate of 914,000.

    Investors Positioning

    After jumping 17.48 percent in the previous week, the net non-commercial combined positions in gold declined 7.13 percent during the week of 11 June to 60,227 contracts. In the past twelve months, the level has declined 56 percent as the developed market equities have risen 22 percent. According to Barclays, the net redemptions from gold-backed ETFs have slowed, with an outflow of 15 tonnes in the first half of June compared to 48 tonnes in the first half of May. The cash-negative gold positions have also fallen to fewer than 70 tonnes. On the contrary, investors in China continue to see gold as a store of value, boding well for the launch of the first two yuan-denominated gold ETFs to be listed on the Shanghai Stock Exchange.

    Reading the Fed

    According to a Bloomberg survey on 7 June, the Fed will likely trim the QE by $20 billion to $65 billion as soon as the October meeting. For the Fed’s meeting, the investors will watch out for the conditions under which the bond purchases will be reduced, the Fed’s outlook for the interest rates as well as the Fed’s projections of the inflation and the unemployment rate.


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  2. #102
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    Dollar rallies broadly on FOMC statement and Bernanke's tapering comments : Jun 20, 2013

    Market Review - 19/06/2013 22:01GMT

    Dollar rallies broadly on FOMC statement and Bernanke's tapering comments

    The greenback rose strongly against other currencies on Wednesday as the Federal Open Market Committee said the downside risk of the U.S. economy and labour market. Dollar was also supported as Federal Reserve Chairman Bernanke said at the press conference the central bank is likely to reduce the bond purchase this year if economic forecast comes in as expected

    Although the greenback rose initially to 95.66 in Australian morning, cross buying of yen versus euro pressured the pair to 94.83 in European morning before trading sideways. Later, price rallied above Tuesday's top at 95.77 in U.S. afternoon after FOMC said the downside risk of the economy and the labor market have diminished, the pair eventually climbed to session high of 97.03 as Federal Reserve Chairman Bernanke said the central bank is likely to reduce the bond purchase this year if economic forecast comes in as expected.

    FOMC statement said 'Fed repeats will buy longer-term treasury securities at pace of $45 billion a month, agency MBS at 40 billion a month; downside risks to outlook for economy and labor market have diminished since the fall; vote in favor policy was 10-2; labor market conditions have shown further improvement in recent months, but jobless rate remains elevated; inflation has been running below target, partly reflecting transitory influences; long-term inflation expectations stable.'

    Fed's Bernanke said in his press conference 'have been reviewing exit principles in recent meetings; strong majority now expects Fed will not sell MBS during process of normalizing policy; decline in jobless rate to 6.5% will not automatically lead to rate increase; increase in target for Fed funds rate, when they begin, likely to be gradual; committee expects considerable period of time between end of asset purchases and interest rate hikes; if economic forecast comes in as expected, committee sees likely reduction in pace of purchases this year; if economic forecast correct, asset purchases will end by the middle of next year; unemployment rate would likely be in vicinity of 7% when asset buys come to an end.'
    The single currency traded narrowly above Australian low at 1.3385 in Asian and European sessions. Later, despite euro's brief rise to 1.3417 in U.S. afternoon, the pair tumbled below Tuesday's low at 1.3326 due to FOMC statement and the comments from Fed's Bernanke. Price eventually hit session low of 1.3262 before stabilising.
    The British pound went through a roller-coaster session on Wednesday. Despite cable's initial fall to 1.5618 in Asian morning, price rose to 1.5670 in European morning due to cross buying of sterling versus euro before falling to 1.5603 after the release of the Bank of England MPC minutes. Later, although the steep fall in eur/gbp pushed the pound above 1.5670 to 1.5678 in New York morning, dollar's broad-based strength pressured cable below Tuesday's low at 1.5565 to a low at 1.5450 in U.S. afternoon before stabilising.

    BOE minutes stated that 'voted 6-3 to keep QE total at 375 billion sterling in June; King, Fisher, Miles voted for 400 billion sterling; MPC voted 9 - 0 keep interest rates at 0.5%; U.K. economic developments in past month generally positive, in line with may inflation report; still likely CPI will temporarily hit 3% in summer, remain close to that level during autumn; rise in global bond yield in past month showed market sensitivity to monetary policy expectations; for some MPC members, this was evidence that further QE would be effective if needed.'

    In other news, IMF said 'Spain has made progress on reforms and economic imbalances are correcting rapid but outlook remains tough; Spain's nominal deficit targets should be flexible in the event growth falls short of expectations; sees advantages to post-bailout credit backstop for Ireland; Ireland's policy programme sound, prospects for 2013 bailout exit "reasonably strong".' German Finance Ministry spokesman said 'cannot see at first sight why Cyprus aid programme should be changed; Cyprus programme should be implemented without further delay.'**

    Data to be released on Thursday :

    New Zealand GDP, Japan leading indicator, China HSBC flash manufacturing PMI, Swiss rate decision, trade balance, German PPI, manufacturing PMI, service PMI, Italy industrial orders, current account, U.K. retail sales, CBI industrial trend, EU manufacturing PMI, service PMI, consumer confidence, U.S. PMI, jobless claim, existing home sales, leading indicator, Philadelphia Fed Survey.



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  3. #103
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    Gold & Silver; Further Weakness Ahead

    Bullion Round Up

    In this article, we would like to just remind our readers that gold and silver remain susceptible to further weakness. Both are trading in a bear market and short sellers have a strong interest to keep prices sustain at lower prices. In addition, many positive news and other elements have not help to spur a rebound rally that is worthy of writing. Rebound rally on both metals have been weak, short term and rather speculative. First there is the lack of demand from investors in the physical market ever since the April sell-off and we continue to see outflow from gold backed ETFs. Second, the US economy is on a recovery path but mixed with hurdles such as sequester, ailing Eurozone economies and a possible slowdown in China. Third, alternative investment can provide better yield elsewhere as the risk of higher inflation subside and the diminishing chance of a global crisis happening also reduce the need to hold safe haven assets.

    Given that the current scenario favours lower gold and silver prices, investors are prone to sell and liquidate their long positions. There is no telling how low prices could go before it is considered a bottom but several analysts call for $ 1307 / $ 1301 and break below that a revisit to $ 1285 is a possibility. Citi analyst Tom Fiztpartick calls $ 1260 as a potential target in the medium term. Others have been more aggressive with their bearish view with gold reaching $ 1150. All of these are possibilities as long as the current negative sentiment remains in force. Owning gold and silver in 2013 has been a dismal choice as the financial year started with the FOMC tapering talks, low inflation numbers as well as asset reallocation. Physical buyers continue to wait on the side line for lower prices and it is evident from the recent lack of interest from Asia.

    Our short term outlook on gold is biased to the downside as the next minor support comes in at $ 1365 followed by $1354, $ 1339 and $ 1321. After the rejection on a move higher, it opens up more rooms for the bears to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that the area is a strong resistance and only a break above $ 1425 will enable the bulls to aim for higher prices. In the meantime, we expect a period of consolidation but with a biased downside potential.

    Gold Technical

    Gold initially rose after touching a low of $ 1361 and managed as high as $ 1376 before the release of the FOMC statement. Prices broke lower post FOMC despite no talks on tapering as the Fed continues its $ 85 billion QE programme. Market reporter from Bloomberg argued that the market has over-tapered and some got disappointed as there were no mention of tapering (i.e. how much and when?). As long as gold trade below $ 1395, the bears continue to dominate and the lack of strong buyers could soften prices further. The bears are clearly winning and have the intention to revisit $ 1321 level. However, the previous low at $ 1338 will be a strong support and only if that is given then we see a potential stop loss trigger scenario that could sent gold lower. Otherwise, we felt that a major short covering could be on the cards if the price is right.

    Resistance: $ 1395, $1400, $ 1423 Support: $ 1355, $ 1337

    Traders Notes: Short gold as it breaks trend line at $ 1390/$ 1395 with a target at $ 1361/$ 1355 – stop loss stands at $ 1403/$ 1425

    Bearish – target $ 1321 Bearish – target $ 1280



    Silver Technical

    Surprisingly silver held at support $ 21.52 and $ 21.43 but weakness in the price look set to continue at the moment. There is no escaping from the sellers as Silver traded lower as selling pressure continues to mount. A weak start to the week as silver made lower high and lower low with most trading contain in the range of $ 21.00 to $ 22.50 area. There were no strong buyers at this price level, instead most are short term speculators dip buying on the market and sell when it spiked higher. Investors favour lower silver prices and we may continue to see it weaken before any rebound rally.

    Resistance: $ 22.51, $ 23.35, $ 25.59 Support: $ 21.10, $ 19.66, $ 19.00

    Traders Notes: Stay on the side line.

    Bearish Bullish – a potential bull run?


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  4. #104
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    EURUSD Forecast for June 20

    Good morning everyone. Wednesday’s forecast went in our direction for the most past, in fact except for two pair all other pairs behaved as we thought it would. There were some strong moves towards the end of the session in the opposite direction due to a news factor that moved the market suddenly. Looks like we have broken out of the range that we spoke about last couple of days. Expecting to see some action on US Dollar in time to come. Today US Dollar together with Japanese Yen is looking weak. I’m not adding any hedged pairs to offset the trading risk. Happy trading everyone!!

    Forecasts OutlookUS Dollar : Weak
    Today we're expecting the EURUSD to proceed Long above the barrier levels of 1.33905 and 1.34221.

    Fundamental Watch- French Flash Manufacturing PMI
    - Libor Rate
    - SNB Monetary Policy Assessment
    - SNB Press Conference
    - German Flash Manufacturing PMI
    - Retail Sales m/m
    - Eurogroup Meetings
    - Unemployment Claims
    - Existing Home Sales
    - Philly Fed Manufacturing Index





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  5. #105
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    The Brief Harmonic Daily Forecaster - AUDUSD

    Resistance: 0.9226-32 0.9255-60 0.9284 0.9312
    Support: 0.9189 0.9162 0.9146 0.9114-32

    BIAS: It's early stages but I'm seeing evidence of a pullback higher - 0.9312-35 possibleMAIN ANALYSIS: Losses continued to be very firm and direct to reach 0.9162. I am beginning to see price edging above the hourly Price Equilibrium Cloud and also a potential double bottom with a break level at 0.9232. If this is seen, while we shall need to take care of any corrections it should send price back higher to the 0.9312 corrective high at a minimum. There is also a possible retracement level around 0.9335. Look for possible bearish reversal indications in this area. Also note next resistance at 0.9350-55 and 0.9380.

    COUNTER ANALYSIS: Directly below 0.9162 would risk further losses to 0.9132 minimum but I suspect as much as 0.9114. Deeper levels are at 0.9060-79 which I feel should be the lowest we see…
    For more information regarding the support & resistance and medium term outlook please see the attached PDF file.
    Good trading
    Ian Copsey


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  6. #106
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    Emergings get hit by Bernanke

    Polish Zloty (EUR/PLN) – EUR/PLN flies high

    Bernanke really shook markets up. Although to be honest, his statements that the Fed will start reducing QE this year were not so shocking. We have all seen the improving condition of the U.S economy so it was just a matter of time when the process of providing liquidity to the markets will be reduced. Still, currency markets reacted strongly, which could have been observed on the less liquid ones. In Poland to add to that, published macro data has not supported the Zloty. Wages in May increased only by 2.3% while industrial production declined by 1.8%, both on a yearly basis. Now, the MPC has no choice but to cut interest rates on the next monetary policy meeting. That will not affect the PLN as lower rates are priced by the market. The Zloty behaves and will behave according to the music played by the EUR/USD, and it seems we might not see a stronger Zloty this summer.
    After breaking the crucial resistance of 4.21 at the end of May, it was just a matter of time when the EUR/PLN will keep flying higher. The upward movement was denied at 4.30, which was tested but remained unbroken. After Ben and his statements, the EUR/PLN had no other choice that go for higher levels reaching 4.35, its highest level since June of last year. The market needs a breather now, so I would expect the PLN to regain some ground, maybe to test the support of 4.30 next week. The stochastic oscillator showing the market is overbought also suggests a corrective movement in the upcoming trading days.



    Hungarian Forint (EUR/HUF) – Testing the 300 level

    Post Bernanke waves have reached emerging markets heavily with capital flowing out from riskier fixed income securities towards safer ones namely T-note and Bund. This renewed seek of safe heaven brought general CE currency weakening with Hungarian Forint among underperformers. The Hungarian National Bank is an outspokenly in favor of expansionary monetary policy with 11 in-row rate cuts since the end of 2011. In addition to this still further reduction in the current 4,50% rate is expected from the board on next Tuesday. Earlier this year MNB decided to cut rates even under hectic Forint market rates in March and April both EURHUF being above the critical 300 price level. On Friday, all eyes in Hungary are on Ecofin group meeting in Luxembourg where ministers will most probably endorse the European Commission’s recommendation that the Council abrogates the excessive deficit procedure against five member states, including Hungary. The market has already priced in a positive decision hence not many factors can pull out the Forint from the loosing trend at this moment.



    Dense market movement occurred this week around the 299,90 EUR/HUF rate with bulls unable to break this key resistance. With this failure Forint can regain some strength but taking into consideration the heavy sell-off triggered by global repositioning the next week can be quite painful. Elliot wave movement can take to EUR/HUF pair to April heights around the 303 level easily after a successful break above the current resistance.

    Romanian Leu (EUR/RON) – Trying to find a new range, 4.45 – 4.60

    EUR/RON rebounded from 4.45 and got very close to 4.55 this week. It appears that Romania needs the IMF shield to be able to withstand outflows that could otherwise put more pressure on the currency, possibly leading to a test of the record 4.65 print for EUR/RON. The privatization of CFR Marfa, the state controlled railway goods transport operator is seen as RON - favorable, together with the launch of the IPO of the nuclear power operator since it may command more benevolence from the IMF. Now that investors feel the winds of volatility and discover a taste of turbulence that the Fed had long time obliterated, RON is vulnerable to regional pessimism. The somewhat fragile governing coalition is a further worry down the road. However the country has a public deficit likely to stay below 3% of GDP and the economy may grow by 2% this year. This said, it is of crucial importance how the ebb and flow of global sentiment would move RON. Since the Fed tide has turned, episodes of RON strength may happen soon, yet may be against the overall trend.
    In technical analysis interpretion, support at 4.45 proved to be reliable, and EUR/RON managed to design a daily trend. Close resistance at 4.5479 is to be monitored, yet any close above 4.54 would already send a bullish signal. Further resistance is at 4.5806, the recent high while 4.60 might provide a good pauste-to-think level if things go crazy next week. There is a glimmer of hope for the bears if Monday opens on a note below 4.51, meaning the evening star would work as a signal of a short-term negative correction. Support is then at 4.49 and 4.47, with respect to the last up-pulse being the 50% and 70.7% retracements.




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  7. #107
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    Gold Plunged Below the April Trough after the June FOMC meeting

    After the June 18-19 FOMC meeting, the U.S. Fed has injected more fear than calm into the gold market. The U.S. Comex gold futures inched up 0.52 percent on Wednesday after the Fed has released its FOMC statement. On Thursday, the gold futures plunged as much as 7.18 percent to $1,275.40 before finishing the day at $1,286.20, the lowest level since September 2010. During Asian Friday morning, the gold futures have rebounded slightly to around $1,290. Year-to-date, the gold futures have declined about 23 percent. The CRB Commodities Index also tumbled 2.91 percent on Thursday, the largest drop in two months. The Dollar Index rebounded 1.62 percent in the past two days and ended at 81.915 on Thursday. The S&P 500 index and the Euro Stoxx 50 index fell close to 4 percent in two days in response to the FOMC meeting.
    What’s New from the Fed?
    Ben Bernanke said that if the economy moves in line with the Fed’s forecast, then the Fed thinks it is appropriate to reduce the pace of the bond purchases later in 2013. The Fed will continue to taper and finish the asset purchases by mid-2014, if the economy is performing as expected. To actually taper the QE3, the Fed needs to be fairly confident that the Q4 GDP in the U.S. will reach 2.3 to 2.6 percent, and the unemployment rate to drop decidedly below 7.2 to 7.3 percent. The inflation rate is expected to stay well below the 2 percent target. The U.S. has been growing at slightly above 2 percent in the first half of 2013 while the unemployment rate is currently at 7.6 percent. The Fed has implicitly set a new target of 7 percent unemployment rate to reduce the asset purchases. The Fed also revised down slightly the GDP growth and the unemployment rate for 2013.
    Gold Sentiment Hammered Further
    The stronger dollar, the rising U.S. bond yield, the weaker-than-expected China May flash manufacturing PMI, the general commodities sell-off, a subdue inflation rate, and the continued outflow from gold-backed ETPs have pushed down gold’s sentiment further. In Bloomberg’s weekly survey, the number of gold bears reaches the highest since January 2010. In the next few days, the market will closely watch the actions of the physical buyers. According to Bloomberg, the gold-backed ETPs have dropped 525 metric tons year-to-date to 2,106 metric tons, compared to a rise of 275 metric tons last year. As gold prices in China have dropped continuously in the past week, volume traded in the Shanghai Gold Exchange has climbed to a one-month high on Wednesday. The gold futures’ RSI has plunged below 25, an oversold territory.
    What to Watch Next Week
    Apart from watching the physical demand response, we will also watch Germany’s June IFO business climate index on 24 June, the June U.S. consumer confidence index and the May U.S. new home sales on 25 June as well as the June Germany unemployment change, the May CPI and the industrial production in Japan on 27 June.


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  8. #108
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    Dollar rises on QE withdrawal expectation : June 24, 2013

    Market Review - 22/06/2013 00:44GMTDollar rises on QE withdrawal expectation

    The greenback strengthened broadly on Friday due to expectation that the Federal Reserve will reduce its monetary easing by the end of this year. The single currency came under further pressure on renewed political uncertainty in Greece as Greece's small Democratic Left party decided to pull its ministers from the three-party ruling coalition.

    Despite euro's brief rise to 1.3255 in European morning, price fell below Thursday's low at 1.5415 in New York morning due to the renewed political turmoil in Greece together with the expectation of QE withdrawal in U.S.. Price eventually hit session low at 1.3098 at New York midday before staging a recovery to 1.3159 on weekend short-covering.

    Although the British pound staged a recovery from Thursday's low at 1.5415 to 1.5531 in European morning, the pair fell sharply in tandem with euro and then pierced through 1.5415 support to a low of 1.5368 in New York morning but rebounded strongly to 1.5456 in U.S. afternoon.

    Versus the Japanese yen, although the greenback staged a strong rebound from Australian low at 96.87 to 98.13 in European morning on active cross selling of yen versus other currencies, offers at Thursday's top at 98.29 capped its upside and price retreated to 97.27. Later, despite dollar's brief fall to 97.33 in New York morning, price staged a rebound to 97.99 at New York before stabilising.

    In other news, Fed's Bullard said in a statement 'felt Fed should have more strongly signaled willingness to defend inflation target; also felt FOMC decision to lay out a more elaborate plan to reduce pace of bond purchases was "inappropriately timed"; felt more prudent for FOMC to wait for clearer signs U.S. economy strengthening and inflation moving toward Fed target before making tapering announcement.' EU's Rehn said 'important to stabilize Greece political situation; important Greece review to be completed in July.'

    On the data front, U.K. PSNCR in May came in at 3.1B, versus the forecast of -2.5B, previous reading was revised to -11.0B. U.K. public sector net borrowing in May was released at 10.5B, versus the expectation of 13.75B, previous reading was revised to 6.6B.

    Data to be released next week :

    German Ifo business climate, current assessment, Italy consumer confidence, U.S. Chicago Fed index on Monday.

    France business climate, EU retail sales, US. Durable goods, retail sales, house price index, consumer confidence, new home sales on Tuesday.

    Germany Gfk consumer confidence, Swiss UBS consumption indicator, France GDP, U.K. CBI distributives trades, U.S. GDP, personal consumption, PCE core on Wednesday.

    New Zealand, trade balance, import, export, Japan all industry index, France consumer confidence, U.K. current account, GDP, EU economic sentiment, business climate, consumer confidence, U.S. personal income, personal spending, PCE index, PCE core, jobless claims, pending home sales on Thursday.

    Japan unemployment rate, CPI, industrial production, retail sales, housing starts, construction orders, U.K. consumer confidence, France PPI, Italy, HICP, PPI, Swiss KOF indicator, Germany CPI, HICP, Canada GDP, PPI, U.S. Chicago PMI, University of Michigan consumer confidence on Friday.




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  9. #109
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    A road map

    The last time the FOMC explicitly tightened monetary conditions was June 2006. While we will still wait few months for another such move it has become clear it will happen sooner rather than later.

    Just for formality let us recall that the Chairman announced as plan to start withdrawing QE3 later this year with an intention to have it completed by the mid of 2014 should Fed’s forecasts prove accurate. Let’s be frank – this is not overly hawkish, there were call earlier this year (from FOMC members) to start downsizing purchases already in June and – more importantly – finishing the program by the end of THIS year. So Bernanke’s call can be – objectively – seen as a moderate step towards a normalization. A reaction on most of the markets was not moderate by any means (actually, the US equity market being the most inflated by the policy reacted, well, cautiously). Does that mean markets were living in another world, believing the QE was meant to last forever? While some might had been, we see at least couple of reasons behind this sort of reaction.

    1. Bernanke’s previous language – ok., to tell the truth there were reasons to believe the Chairman wanted to print forever; even us, in general expecting a reversal and a strong appreciation of the USD, expected BB to manouver in order to limit the impact on market rates; so there was a boldness factor that came into play.
    2. Inflation – was totally ignored; partly for some reason – with the core at 1,7% and a disinflationary effect of import prices fading it is challening to support such agressive policy with deflation argument.

    3. China – a tumble in China was overshadowed by the Fed yet it certainly helped to fan fears, especially on emerging markets.
    4. "A game of chicken" – within 6 months between November and May the S&P500 advanced by 26% even though the US economy did not shock on the upside; some might have viewed this period as the last window of opportunity to buy before the Fed turns the music off; because of this phenomenon, even a very moderate normalization may legitimely lead to a rapid adjustment of expectations and thus – asset prices.


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  10. #110
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    Gold & Silver; Selling Exhaustion?

    Bullion Round Up

    To round it all up, the month of June was another setup for a bigger fall on gold and silver. Despite a weaker US dollar index, both failed to capitalise to move to higher prices. Instead, gold faced strong resistance at the high of $ 1425 after previous capitulation high of $ 1487 while silver bullish hammer reversal was history. A new low was made on both not so precious metals as investors turn sellers, while others are busy liquidating their positions. We have warned in our previous note that after a brief rebound rally, previous investors will convert into sellers as they look to cover their gold positions and ride the bear market. A brief revisit to $ 1321 lasted very briefly and a small pump and dump took effect post FOMC statement. Chairman Bernanke did signal tapering and economists’ survey suggests that tapering may take effect this September in the region of $ 20 billion.

    What can we expect this week? We felt that the PM market may need time to consolidate and digest the current situation it is in. Gold is oversold but we will not discount the fact that it will retest previous low of $ 1269 before embarking on a rebound. In addition, we are close to end of the month where some short covering is expected. Short covering may help gold rebound but we do not see a shift in the bearish sentiment and after the rebound we see further weakness ahead. Gold back ETFs continue drain out, US economy still expected to recover and Fed tapering is looming. A rebound in gold is expected to be short live for now and tapering expectation will be data dependent which on the other hand could affect the dollar index.

    Economic data that we are interested are as follows: Germany Ifo business climate index, Italian Trade balance, Italian Retail Sales, US Core Durable Goods Orders, US New Home sales, US GDP (QoQ), US Chicago PMI data and host of European countries CPI and PPI data.

    Ole Hansen of Saxo bank made a useful summary on the possible scenario for next few weeks:
    “…one could argue that most of the long liquidation from institutional investors and short selling by hedge funds has been done by now. Other markets, especially bond and equity markets in developed economies, may have further to fall. Gold could eventually receive some support on this basis, but if the dollar simultaneously strengthens the positive impact may be limited.”

    Gold Technical

    We maintain our bearish view on gold and the selling to continue a little longer. In a healthy market, the sellers usually will face exhaustion and we felt that the gold market soon consolidate before any significant rebound. The new low is set at $ 1269 but we felt that the market could retest low before a potential rebound. Some spark of physical demand appears in Thailand but the up take is not as great as the previous sell off.

    Investors are wary of another leg lower but dip buyers could eventually take the market higher by surprise.

    Only a break above $ 1325 will give bulls some comfort but we see a potential low at $ 1250 for now. Otherwise, we felt that a major short covering could be on the cards if the situation allows.

    Resistance: $ 1325, $1366, $ 1423 Support: $ 1269, $ 1250, $ 1200
    Traders Notes: Buy at $ 1250/$ 1260 small contract to accumulate – Stop Loss at $ 1235 with target at $ 1318 and $ 1340.
    Bearish – target $ 1240 Neutral



    Silver Technical

    Silver prices fared no better but last week it ended with a rebound to a high of $ 20.02. We remain bearish and see further downside on the white metal for now. The lack of physical demand adds further selling pressure for now and unless Gold prices can move higher, then we expect silver to retest lower numbers. There were no strong buyers and selling will continue to dominate the market. Investors favour lower silver prices and we may continue to see it weaken before any rebound rally.

    Resistance: $ 21.51, $ 22.35, $ 25.59 Support: $ 19.38, $ 19.00
    Traders Notes: Stay on the side line.
    Bearish Bullish – a potential bull run?



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