More from Tyler Durden:
As the chart below shows, gasoline stocks rose 0.5 million bbls last week to 241Mm bbl and is now 11.8% higher than last year.
Source: Oil Crashes To $41 Handle After Surprise Inventory Build, Production Rise | Zero Hedge
Oil Crashes To $41…… | Zero Hedge
Tyler Durden suggests that crude oil prices will fall in the second half of 2016:
Tracking last year’s pump-and-dump of hope perfectly.
As demand is set to tumble…
Source: Oil Crashes To $41 Handle After Surprise Inventory Build, Production Rise | Zero Hedge
US rig count rises
The recent peak in crude prices coincides with the bottom for the US oil rig count (discussed Monday).
Gold & support at $1300
The daily chart of Gold shows consolidation forming between $1310 and $1335 per ounce. Respect of the $1300 support level would signal a healthy up-trend. Reversal without touching the support level would reveal buyers’ eagerness.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
Gold, the Yuan & Donald Trump
China’s Yuan continues its slide against the Dollar, with USDCNY testing resistance at 6.70. The current retracement is likely to respect support at 6.60, offering a target of 6.80*.
* Target calculation: 6.70 + ( 6.70 – 6.60 ) = 6.80
A depreciating Yuan is likely to drive demand for gold as well as hard currencies. Rising political uncertainty — in Europe, the Middle East and the US — is expected to add fuel to the fire. Strong polling by Donald Trump alone could drive gold to its long-term target of $1550/ounce*. Expect retracement to test the new support level at $1300/ounce. Respect is likely and would signal an advance to $1400/ounce.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
Disclosure: Our managed portfolios are heavily overweight gold stocks.
Gold surges as the Pound and Yuan fall
The Yuan is sliding against the Dollar, with USDCNY breaking through resistance at 6.60. Expect further capital flight, both from residents and offshore investors. Borrowers will also seek to repay Dollar-denominated loans and replace them with facilities in the local currency, adding further pressure on the Yuan.
The PBOC has been encouraged by fading prospects of further rate rises from the Fed, with 10-year Treasury Yields falling to a new all-time low of 1.37 percent, compared to 1.40 percent in 2012.
….And the Pound falling to a 30-year low.
Falling currencies and lower long-term interest rates are both good news for gold bugs, with spot gold surging to $1370/ounce. Expect retracement to test the new support level at $1300/ounce. Respect of the band of support at $1280/$1300 is likely and would signal another advance, with a target of $1400/ounce*.
* Target calculation: 1300 + ( 1300 – 1200 ) = 1400
Gold rises as the Yuan and interest rates fall
China seems to have given up on its policy of supporting the Yuan against the Dollar, with USDCNY breaking through resistance at 6.60. Depleting foreign reserves to support the Dollar-peg was always going to be a tough call for the PBOC. But the alternative of increased capital flight and rising counter-measures from trading partners may exact an even higher price.
Perhaps the PBOC was encouraged by fading prospects of further rate rises from the Fed this year, after BREXIT. 10-Year Treasury Yields are headed for a test of support at the all-time low of 1.40 percent in 2012.
Gold broke resistance at $1300/ounce and is now retracing to test the new support level. BREXIT, a weakening Yuan, and lower interest rates are all likely to fuel demand for gold. Respect of the band of support at $1280/$1300 is likely and would signal another advance, with a target of $1400/ounce*.
* Target calculation: 1300 + ( 1300 – 1200 ) = 1400
Gold surges as BREXIT looms
It looks like the LEAVE vote has it, with a lead of more than 900,000 so far.
Gold bugs seem to think so, with the spot price blasting through resistance at $1300/ounce. Retracement that respects the new support level would confirm a target of $1550*.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
Gold: Should I BREXIT?
Odds of a BREXIT are drifting at the bookmakers, with REMAIN a firm 1 to 4 favorite. Fears of a BREXIT have been driving demand for gold and a REMAIN vote is likely to spur a sell-off.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
Breakout above resistance at $1300/ounce turned into a bull trap with a sharp retreat to support at $1250/$1260. A REMAIN vote on June 23rd would test support at $1250 and possibly $1200. But the up-trend remains intact if support at $1200 holds.
Political uncertainty is unlikely to fade before the November US election. And economic uncertainty, fueled by Chinese instability, is likely to last a lot longer.
Capital outflows from China continue, with USDCNY running into resistance at 6.60. This is a sign that PBOC sale of foreign reserves has resumed, weakening the Dollar and boosting demand for Gold.
Gold’s up-trend is likely to continue. And breakout above $1300 would offer a long-term target of $1550/ounce*.
Disclosure: Our Australian managed portfolios are invested in gold stocks.
Gold surges on BREXIT fears
Long-term interest rates continue their decline, with 10-year Treasury yields breaking support at 1.65 percent. Breach signals a test of the all-time (July 2012) low of 1.40 percent.
Gold broke resistance at $1300/ounce on fears of a BREXIT vote on June 23rd and expectations that the Fed will need to soft-pedal on interest rates. Breakout offers a long-term target of $1550*.
* Target calculation: 1300 + ( 1300 – 1050 ) = 1550
Chinese buying of gold has been relegated to secondary status, at least for the next week. Sale of foreign reserves appear to have resumed, with the USDCNY running into resistance at 6.60. PBOC sale of foreign reserves weakens the Dollar, boosting demand for Gold.
Disclosure: Our Australian managed portfolios are invested in gold stocks.