Category: Gold & Commodities

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Gold: “Trump rally” unlikely to last

Gold reacted with urgency to the news that Donald Trump was closing on Hillary Clinton in the polls. After a lackluster start the rally gained new energy in the last week, with the yellow metal climbing to test resistance at $1300/ounce.

Spot Gold

Experienced pollsters seem to think that Trump’s gains are too little and too late. According to GOP pollster Whit Ayres, in this PBS Newshour interview, Trump has about the same chance of winning as drawing an inside straight in poker. “He has spent his entire campaign preaching to the converted rather than reaching out to undecided voters….”

Unless there is an upset in next week’s election, I expect gold to respect resistance at $1300/ounce, followed by a test of primary support at $1200.

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Crude stalls

December Light Crude retreated below support at $50/barrel, suggesting another test of primary support at $42/barrel.

December Light Crude

Respect of primary support would suggest further ranging between $42 and $52/barrel. Breach of support, which seemed so unlikely only two weeks ago, is now a possibility and would warn of another test of the January trough at $35/barrel.

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Gold: Further weakness likely

US Treasury yields are rising, with the 10-year yield breaking through 1.80 percent to signal a test of 2.0 percent. Further rises are likely on the back of stronger GDP figures for the last quarter.

10-year Treasury Yields

The Chinese Yuan continues to depreciate against the Dollar in anticipation of another rate rise from the Fed.

USDCNY

Spot gold displays a weak retracement off support at $1250/ounce, with short candles indicating a lack of conviction. Another primary decline is likely and would test primary support at $1200.

Spot Gold

The ASX All Ordinaries Gold Index respected the descending trendline, suggesting another decline. Reversal below 4300 would confirm, offering a target of 4000.

All Ordinaries Gold Index

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Crude: Another advance likely

Nymex December Light Crude is consolidating above the new support level at $50/barrel. Respect is likely and would confirm the primary up-trend. Target for an advance is $56/barrel*.

December Light Crude

* Target: 50 + ( 50 – 44 ) = 56

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Gold selling pressure continues

Selling pressure on gold continues, with the SPDR Gold [GLD] ETF consolidating in a bearish narrow band above support at 119. Twiggs Money Flow below zero warns of long-term selling pressure. Continuation of the down-trend is likely and breach of 119 would signal another decline.

SPDR Gold

Spot gold displays a similar narrow consolidation at $1250/ounce. Continuation is likely and would test primary support at $1200.

Spot Gold

The ASX All Ordinaries Gold Index recovered above resistance at 4500 but has so far respected the descending trendline. Respect is likely and reversal below 4300 would signal a decline to 4000.

All Ordinaries Gold Index

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Gold: The importance of $1200/ounce

Interest rates are rising, driving gold lower. Long-term Treasury yields are heading for a test of resistance at 2.0 percent but a lot depends on continued stability in financial markets.

10-Year Treasury Yields

The Chinese Yuan continues its devaluation against the Dollar. Any sharp movements would spur global instability and increase demand for gold. But at present Dollar appreciation proceeds at a measured pace.

USDCNY

Selling pressure on gold has increased, reflected by the steep fall of Twiggs Money Flow on the SPDR Gold [GLD] ETF. A larger (TMF) peak near zero would warn of a long-term sell-off.

SPDR Gold

Spot gold has paused in its descent, with a short candle on the weekly chart reflecting short-term support at $1250/ounce, but expect a test of primary support at $1200.

Spot Gold

A long-term monthly chart of gold reflects the importance of support at $1200. The high of 2009, the lows of 2013, and the recent lows in April and June, all reinforce strength at $1200. Breach of this level would signal a long-term down-trend.

Spot Gold

The ASX All Ordinaries Gold Index retraced to test resistance at 4500 after the recent breakout. Respect is likely and would signal decline to 4000.

All Ordinaries Gold Index

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Crude tests key level at $50

December Light Crude is retracing to test new support at $50/barrel after the recent breakout.

December Light Crude

If we look at the longer term weekly chart we can see how important this level is. Respect of $50 would confirm the primary up-trend. There is still doubt that support will hold — and that OPEC will be able to craft an agreement that will satisfy members while restricting supply. Failure would suggest that crude will revert to ranging between $40 and $50.

Nymex Light Crude

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Gold: Brief pause at $1250

At present, interest rates are driving gold. How long this will continue is hard to say. It depends on what shocks lie in store for the global financial system. Two pending rolls of the dice are the November 8 elections and negotiations over Britain’s exit from the EU.

Long-term Treasury yields are rising while gold is falling. Expectations of a rate rise after the November election are growing and a test of resistance at 2.0 percent is likely. But a lot depends on continued stability of financial markets.

10-Year Treasury Yields

Spot gold reacted to rising interest rates by breaking support at $1300/ounce, warning of a test of primary support at $1200. A brief pause at medium-term support at $1250 is indicated by a spinning top candlestick, signaling indecision. Support at $1250 is unlikely to hold but the primary up-trend is intact unless support at $1200 is broken.

Spot Gold

The ASX All Ordinaries Gold Index broke support at 4500, warning of a primary down-trend. The immediate target is 4000.

All Ordinaries Gold Index

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Gold breaches $1300/ounce

Spot gold broke support at $1300/ounce warning of a test of primary support at $1200. The up-trend has lost momentum, reflected by penetration of the rising trendline, but consolidation above $1200 would suggest that the trend is intact. Breach of $1200 is now as likely, however, and would warn of a test of the 2015 low at $1050/ounce.

Spot Gold

The ASX All Ordinaries Gold Index is testing support at 4500. Breach is likely and would warn of a primary down-trend.

All Ordinaries Gold Index

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Gold loses direction

Inflationary pressures are low, Yuan depreciation is gradual, Europe looks like it will ‘muddle through’ on Brexit and Hillary Clinton is favorite to win the November election. No sudden shocks to spark a rally in Gold, with the spot metal consolidating in a narrow range above $1300/ounce. But life is like a box of chocolates. You never know what you’re gonna get. (Forrest Gump – 1994).

Spot Gold

* Target calculation: 1375 + ( 1375 – 1300 ) = 1450

Short retracement indicates that support at $1300/ounce is strong. Breakout above $1350 would signal a fresh advance, with a target of $1450*. Breach of support is less likely but would warn of a test of primary support at $1200/ounce.

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