Gold & Commodities Archives - Page 27 of 78

June 23, 2017

Bearish outlook for the ASX

Iron ore rallied slightly during the week. But this is a bear market. Expect resistance at $60 to hold and breach of support at $50 is likely, signaling another decline.

Iron Ore

The ASX 300 Metals & Mining index is testing support at 2750. Breach is likely and would signal a primary down-trend.

ASX 300 Metals & Mining

Banks are also under pressure, with the ASX 300 Banks index consolidating between 8000 and 8500. Breach of 8000 is likely and would confirm the primary down-trend.

ASX 300 Banks

The ASX 200 displays a broadening wedge consolidation. A failed down-swing, recovering above 5800 without reaching the lower border, would be a bullish sign. But this seems unlikely with a bearish outlook for the two largest sectors.

ASX 200

June 23, 2017

Gold-Oil ratio warns of further easing

I don’t attach much significance to the Gold-Oil ratio on its own but it’s back in overbought territory, above 25.

Spot Gold/Light Crude

The chart below — plotting inflation-adjusted prices (over CPI) — far better depicts the relationship between gold and crude oil. Each major spike in crude prices over the last 50 years has been followed by a rising gold price.

Spot Gold/Brent Crude

Falling crude prices are likely to weaken demand for gold over the next few years, both through lower inflation and declining foreign reserves of major oil producing nations.

June 23, 2017

Gold finds support at $1250

The Dollar Index continues to test support at 96.50. The primary trend is down and breach of support is likely, signaling a decline to test the 2016 low at 92/93.

Dollar Index

Spot Gold found support at $1250. A weaker Dollar and rising political uncertainty both favor an up-trend but rising interest rates are expected to weaken demand. Respect of support at $1250 would confirm the up-trend, while breach of $1200 would warn of another decline.

Spot Gold

June 22, 2017

Crude headed for $30 if OPEC fails to deepen cuts

Crude could fall to $30/barrel next year — and stay there for two years — according to Fereidun Fesharaki, chairman of consultants FGE.

Oil at $30/b oil next year if OPEC fails to deepen cuts, IAEE conference hears https://t.co/wUuljZcdya pic.twitter.com/RWTPCUkxBv

— Oilpro (@Oilprocom) June 20, 2017

Nymex Light Crude breached support at $45/barrel, signaling a primary decline. Expect further support at $40 but penetration of this would target the 2008 low at $30 and the 2016 low at $25 a barrel.

Nymex Light Crude

June 16, 2017

Gold and the Dollar test support

The Dollar Index is finding support at 96.50/97; the latest long tail on the weekly chart signaling buying pressure. But the primary trend is down and breach of support would signal a decline to test the 2016 low at 92/93.

Dollar Index

Spot Gold is testing support at $1250. Fundamentals, like a weaker Dollar and rising political uncertainty, still favor an up-trend. Respect of support at $1250 would confirm. Breach of $1200 is unlikely but would warn of another decline.

Spot Gold

June 16, 2017

Strange week on the ASX

Strange week on the ASX, with strong jobs numbers from the ABS causing a surge in the Aussie Dollar and a more optimistic outlook on the ASX.

But Iron ore continues to fall, headed for a test of 50.

Iron Ore

The ASX 300 Metals & Mining index respected resistance at 3000 and is headed for a test of primary support at 2750. Breach would confirm the primary down-trend.

ASX 300 Metals & Mining

The ASX 300 Banks index respected resistance at 8500 and is likely to test primary support at 8000. Again, breach would confirm the primary down-trend.

ASX 300 Banks

The ASX 200 has formed a broadening wedge consolidation, in a down-trend. Declining Twiggs Money Flow indicates some selling pressure. Expect a test of primary support at 5600. Again, breach would warn of a primary down-trend. But a failed swing (that respects 5700) would warn that all bets are off and the index may be preparing for a rally.

ASX 200

June 12, 2017

Crude tests support at $45/barrel

Nymex Light Crude is testing support at $45/barrel. Breach would offer an immediate target of $40. Follow-through below $40 would signal another test of the 2008/2016 lows at $30.

Nymex Light Crude

The chart below plots long-term crude prices adjusted for inflation. Recent falls show real crude prices returning to their previous trading range (0.1 to 0.2) before the 2004 to 2015 “China boom”.

Nymex Light Crude/CPI

The 2004 to 2015 surge in crude prices is very likely a major cause of low global growth over the last decade. Return to the previous trading range would be a bullish sign for the global economy.

June 10, 2017

ASX banks and iron ore drag the index lower

Last week I wrote: “I believe that the latest rally is a secondary reaction and that the ASX is headed for a down-turn, with miners and banks leading the way. But it’s no use arguing with the (ticker) tape.” This week the ticker tape backs up my bearish sentiment, so I am a lot more comfortable.

Iron ore continues to fall, headed for a test of 50.

Iron Ore

Banks’ bear market rally also petered out, with the ASX 300 Banks index headed for a test of support at 8000. Breach would confirm the primary down-trend.

ASX 300 Banks

The ASX 200 broke support at 5700. Declining Twiggs Money Flow signals selling pressure. Breach of primary support at 5600 would warn of a primary down-trend.

ASX 200

June 10, 2017

Gold retraces to test $1250

The Dollar Index found short-term support at 96.50/97 but the primary trend is down. Breach of support is likely and would signal another decline. The medium-term target is the 2016 low at 92/93.

Dollar Index

Spot Gold encountered resistance at $1300/ounce and is retracing to test support at $1250. Fundamentals, like a weaker Dollar and rising political uncertainty, still favor a continued up-trend. Respect of support at $1250 would confirm.

Spot Gold