GOLD PRO WEEKLY , June 26 - 30, 2017

[Sive Morten]

Fundamentals

(Reuters) - Gold prices climbed to one-week highs on Friday, boosted by a weaker dollar, economic
and political uncertainty around the world, as well as the limited prospect of further interest rate rises in the United States.

The Federal Reserve should wait on any further rate increases until it is clear inflation is reliably heading to the Fed's 2 percent target, St. Louis Fed President James Bullard said on Friday, highlighting the central bank's struggle over how to weigh a recent slip in the rate of price increases.

However, Bullard does not currently vote on the Fed's policy-setting committee. Spot gold was up 0.44 percent at $1,255.7 an ounce by 2:04 p.m. EDT (1804 GMT) after earlier touching a session high at $1,258.81. U.S. gold futures rose 0.6 percent to settle at $1,256.4. Prices were on track for their first weekly
percentage gain in three weeks.

"Gold finally made an effective stand this week after a fortnight of declines and may have established a short term bottom at $1,240," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

"Looking ahead, market will parse Chair (Janet) Yellen next week to see if she makes any notable changes to the Fed's stance since the June meeting."

Allegations of ties to Russia have cast a shadow over U.S. President Donald Trump's first five months in office, North Korea testing a rocket engine and Brexit negotiations are all fuelling concern about global stability.

"Political noise out of Washington regarding Trump's ties with Russia is unlikely to provide lasting support to gold while an escalation of the geopolitical tensions with North Korea is a bullish wild card," Julius Baer analysts said in a note.

The dollar fell against a basket of major currencies on Friday , on track for its biggest single-day drop in three
weeks, on persistent doubts whether the Fed would raise interest rates again this year due to softening inflation data.

Further pressuring the dollar was Markit's flash June reports on U.S. factory and services activity, which was weaker than expected, while the government said new home sales rebounded more than expected in May.

Gold is often used by investors as a hedge against political and financial uncertainty. But it doesn't earn interest, dividends or coupons and it costs money to insure and store. A rising U.S. currency makes dollar-denominated metals more expensive for holders of other currencies, which potentially could subdue demand.
The Fed's rate rise on June 14 saw investors sell gold.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust , have fallen to 27.456 million ounces from 27.875 million ounces on June 13. On the technical side, the first upside barrier comes in around $1,260 near the 55-day moving average. That is followed by the 21-day moving average at around $1,264, while the 100-day moving average at $1,249 provides strong support.

COT Report
CFTC data shows typical action for retracement. As gold price starts to decrease net speculative position has dropped as well as open interest. It means that some part of long positions have been closed. Still, the change is not very large right now.

SPDR Fund data also shows that overall demand for a gold is not very sensitive to recent price fluctuations. SPDR storages mostly stands at the same level despite recent price fluctuations. It means that Investors keep longs and give more value to bullish factors rather than bearish. Overall sentiment is moderately bullish right now:

Technicals
Monthly

June month is rather volatile for gold. As we've talked many times already - gold way will not be streight. We still keep bullish view on gold market in long-term perspective. Right now, we see that our two major backwind factors for gold are working. They are - D. Trump political volatility and uncertainty and - careful Fed policy that, as we suggest, will not tight economy growth by agressive rate policy in 2017. Both of them have provided support to gold, or better to say - depress USD consistently in 2017. As we've talked previously, we think that Fed will rise rate only twice in 2017 and June was a last time. Overall US statistics looks unstable and this provides doubts on rate hike in 2017. Probably Fed should let US economy to get inlfationary pace first.

From technical point of view our major pattern is reverse H&S on monthly chart. Currently, as market stands at the edge of 1170 Fib support, we could talk on H&S pattern. Besides the shape itself, some features here that in general typical for H&S. For example, relation between head and shoulders - 1.618. Butterfly... very often first part of H&S takes the shape of butterfly pattern...

At this moment we do not have questions and serious doubts on perspective of H&S pattern. Market shows normal behavior for its shape. Also we have nice bullish divergence with MACD that is also typical for reversal patterns. On monthly chart we could specify two relatively close targets. First is YPR1 around 1330, next one is neckline - around 1380 area.

We will change our opinion if market will drop below 1170 area. In this case gold will meet the hazard to get butterfly pattern with 1000 and lower targets.

In June market has chances to form another bullish grabber. In this case we get more signs that point on upward action, at least above 1300 area.

Right now gold is mostly driven by external factors, mostly political. They are very volatile. And we see reflection of political issues volatility on gold prices. But we think that there are a lot of political issues ahead, as in EU as on Middle East. That's why we mostly suggest that politics will some kind of durable supportive factor for gold, at least in 2017. In 2018 it will probably remain, but Fed will turn to more agressive policy and this could compensate political impact.

Weekly

So, our last suggestion was correct and reversal candle that was formed on top two weeks ago, indeed has got continuation and price action has dropped further.

At the same time, as we've said, this action indeed could be just technical and it is not neccesary that it should lead to collapse and destruction of bullish scenario. Right now we see that price has reached MPP and stopped. Although trend has turned bearish here, we do not have any signs of bullish collapse yet.

Still weekly chart brings nothing new to overall picture, as recent fluctuations were really small and mostly have impact only on daily and intraday charts.

Daily

On daily chart, guys, we do not see something really new. Only upside reaction on strong support area that we've talked about within a week. Upside bounce looks gradual and mostly suggests that this is a retracemen by far, but not a re-establishing of long-term trend.

Maximum that we could extract here guys is just B&B "Sell" Look-alike pattern. At least, I do not see something else here. Thrust down could be nice, if we do not have this spike up in the middle. As price is approaching to 1262 major Fib level - we could get deep retracement down out from it, i.e. B&B "Sell" price behavior.
Even without relation to B&B name, this retracement probably should happen, as thrust down was rather strong and bearish momentum is still here. Still, this trade mostly will be short-term and should be trated as scalp trade. Actually it has no relation to major tendencies and mostly is a technical one.

Intraday

4-hour chart mostly confirms our suggestion on higher upward retracement. Here we see that market has passed through first 1255 level and is coming to our major destination - K-support around 1261. Also this natural support/resistance area:

On hourly chart we have the same AB=CD pattern and 1260 target. So, our bearish scalp setup could be triggered even on Monday, if gold will complete AB-CD target and finalize it by butterfly "Sell" pattern. In this case minimal target will be around 1248-1250 Fib support. But also it could happen that gold will continue 4-hour AB-CD to next 1222 target. Right now, price shows rather gradual action and it could be just a retracement before downward continuation.

Conclusion:

Long-term charts barely has changed during last week. In general, retracement down could continue as current price action doesn't show any signs of thrusting action yet and mostly reminds a retracement.

On Monday we will be watching for our short-term bearish setup that is based on daily kind of B&B pattern as trade could start as soon as market will reach 1261 area.


The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.

 

[Sive Morten]

Good morning,

(Reuters) - Gold held steady on Tuesday supported by an easing dollar, with investors looking to a speech later in the day by Federal Reserve Chair Janet Yellen for clues on the outlook for U.S. monetary policy.
Yellen is scheduled to take part in a discussion on global economic issues at London's Royal Academy.
She will likely reiterate the central bank's positive views about the U.S. economy and the Fed's stance of raising interest rates once more this year, said OCBC analyst Barnabas Gan.

Spot gold had risen 0.1 percent to $1,244.96 per ounce by 0428 GMT. It hit a near six-week low of $1,236.46 in the previous session. U.S. gold futures for August delivery fell 0.1 percent to $1,245.40 per ounce.

"We remain somewhat cautious about gold here as the poor looking charts and the fact that funds seem to be paring length should keep the pressure on the complex for a while longer," said INTL FCStone analyst Edward Meir. "We think prices could eventually get to the $1,220-$1,225 level, at which point we could see some bargain-hunting set in by those betting that the stronger dollar and the better tone in U.S. stocks could be derailed, at least temporarily," Meir added.

On Monday, gold tumbled to its lowest price in nearly six weeks as a large sell order hit sentiment, though losses were limited by political uncertainty around the world.

"We are still keeping out eye on geopolitical tensions, gold thrives in uncertainty – and increased uncertainty in the near term should actually push gold prices up," said OCBC's Gan.

Allegations of ties to Russia have cast a shadow over U.S. President Donald Trump's first five months in office, while the British government's looming Brexit talks are also fueling concern about global stability.
Meanwhile, tensions rose as the U.S. Supreme Court on Monday handed a victory to President Trump by reviving parts of a travel ban on people from six Muslim-majority countries.

The recent narrowing of credit spreads, record stock prices and falling bond yields could encourage the central bank to continue tightening U.S. policy, influential Fed official William Dudley said according to remarks published on Monday.

Gold has shown superb action recently guys, due huge short order on futures market. Market-makers game has grabbed all stops below 1245 area and turned short-term sentiment on a bullish side. Indeed, yesterday we've talked on B&B "Sell" perspective, but right now we could get DRPO "Buy" pattern. Although flaws of this pattern are the same as on B&B, but it could work, as we have some bullish features. First is strong support area, second - W&R of previous lows. Target of this pattern will be around 1268 area.
Today Mrs. Yellen will talk and my opinion - she really could be more dovish than investors expect. May be this huge sell order was initiated to close long-term gold shorts using stop loss orders that were placed below 1245. In video I've explained how this works:

On 4-hour chart, as market has failed to start action to next 1222 target - it could show stronger upside retracement to 1265 or even 1274 major Fib resistance area:

This could be really risky trade, but if you want to take part - you can use hourly chart and fib supports to go long. I think that 1247 could be viewed for entry while stop should be somewhere below 1245 K-support area. Because if gold will reverse down, erase recent long white candle and drop below 1245 - this could mean destruction of bullish setup, as well as daily DRPO pattern, guys. By the way - it has not been confirmed yet, as we do not have second close above 3x3 DMA.... So, as you can see, risk degree is higher with this setup:

 

[Sive Morten]

Good morning,

(Reuters) - Gold prices firmed on Wednesday as the dollar struggled and shares weakened after a vote on U.S. healthcare reforms was postponed and European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year.

Asian shares slumped on Wednesday after Wall Street was knocked hard as U.S. Senate Republican leaders delayed a vote on a healthcare overhaul on Tuesday until next month, adding to investor worries about President Donald Trump's ability to deliver on his promises of tax reform and deregulation.

The dollar index , which weighs the greenback against a basket of six currencies, slipped to 96.322 on Wednesday, its lowest since November. Spot gold rose 0.4 percent to $1,251.91 per ounce by 0408 GMT.
U.S. gold futures for August delivery was up 0.5 percent to $1,252.50 per ounce.

"Gold prices recovered from most of the sudden plunge in prices earlier this week, with huge volumes being bought on the open in Europe," ANZ said in a note. "These gyrations point to erroneous trades, with little
macro-events inducing such volatility. In the end, gold is back where it all started at around $1,250/oz," it added.

The precious metal slid 1 percent on Monday as a large sell order hit sentiment, though losses were limited by political uncertainty around the world.

"The dollar and the equities are on the back foot at the moment, providing a little support to gold," a Sydney-based trader said.

Wall Street's volatility index , which measures implied volatility of stock options and is often seen as an
investor fear gauge, rose nearly 12 percent on Tuesday providing some additional support, the trader added.

Gold is used as an alternative investment during times of political and financial uncertainty.

On Tuesday, Draghi opened the door to tweaks in the ECB's aggressive stimulus policy, fuelling market expectations that the central bank will announce a reduction of stimulus as soon as September.

Today guys, actually it is not much to comment here. our DRPO LAL pattern theoretically has been confirmed, as yesterday's close stands few cents above 3x3 DMA, but we do not see yet bearish capitulation action there. Price behaves lazy and heavy and is flirting around the same daily K-support:

On hourly chart our trading plan mostly was successful. So, entry point around 3/8 Fib was filled and stop below K-support was untouched. But upside reaction right now looks so-so. Actually yesterday I've traded this setup and close half of position at fast upside bounce. Now I keep the rest with breakeven stop...

Right now we have neither downward breakout and action to 1222 nor upside action, thus it is very difficult to talk on fargoing perspectives of gold. Let's see what final will be with our DRPO LAL pattern...

 

[Sive Morten]

Good morning,

(Reuters) - Gold prices rose on Wednesday as the dollar weakened for a second straight day following a global cyber attack and a delay to U.S. healthcare legislation that fueled doubts about President Donald Trump's ability to pass measures expected to boost the economy.

The dollar sank to its lowest level since November while the euro hit a one-year high after European Central Bank President Mario Draghi on Tuesday appeared to hint that stimulus could be trimmed this year, though sources later said he had been misinterpreted.

A weaker greenback makes dollar-denominated bullion cheaper for holders of other currencies and can increase demand. Spot gold was up 0.2 percent at $1,249.20 an ounce by 2:09 p.m. EDT (1809 GMT). It was on track to close June down 1.5 percent, but for the second quarter finish little changed. U.S. gold futures settled up 0.2 percent at $1,249.10.

"For the remainder of this year we expect gold prices to profit slowly but surely from a weaker U.S. dollar and to rise at a modest pace," ABN Amro analyst Georgette Boele said. "Our year-end forecasts for 2017 and 2018 are $1,300 and $1,400 per ounce, respectively."

While the weak greenback was seen giving support to gold prices, rising yields on U.S. benchmark 10-year Treasury notes were seen preventing stronger gains. The risk of a deeper stock market correction meant investors now wanted to keep their gold, said Ole Hansen, head of commodities strategy at Saxo Bank.
"With the selling appetite fading, it gives some room to the upside," he said.

Stock investors were also on edge after U.S. Federal Reserve Chair Janet Yellen said shares may be over-valued, Hansen said.

However, bond yields rose after Draghi's comments on ECB stimulus, limiting the appeal of non-yielding bullion. On the technical side, gold rose above its 100-day moving average. Fibonacci resistance was at $1,255.20, analysts at ScotiaMocatta said in a note.

"Expect to see prices perking up heading into the latter part of the week, especially if the combination of a weaker dollar and U.S. equity markets stays with us for a little while longer," said INTL FCStone analyst Edward Meir in a note.

On daily gold, we probably should forget about DRPO "Buy" pattern, guys. Yes, theoretically it looks OK, but it doesn't show price action that it should to. That's why we can't rely on int any more. On daily chart Tod-Tom we will keep an eye on possible bearish grabber. If we will get it, then it could the first sign of possible action to 1222 target:

On 4-hour chart we see lazy and heavy action. As it was before drop as it stands after drop - nothing has changed really, price i showing random walk without any idea. This is definitely not thrust and gold has more chances to drop furtther:

ANother bearish sign that I do not like is inability to pass through WPP for 3 times. In general we have here wide triangle is forming. Taking in consideration type of price action and situation around WPP, it seems that gold has more chances to drop if no new supportive factor will rise on horizon:

 

[Sive Morten]

Good morning,

(Reuters) -
* Spot gold was nearly flat at $1,245.08 per ounce at 0104 GMT. It was set to end about 1 percent lower for the week, about 2 percent lower for month. For the quarter, gold is down 0.3 percent.

* U.S. gold futures for August delivery fell 0.1 percent to $1,245.10 per ounce.

* The dollar extended its losses on Friday as major central banks signalled that the era of cheap money was coming to an end in a boon to sterling, the euro and Canadian dollar, while Asian shares were hit by dismal performances of European and U.S. markets.

* The world's top central bankers have delivered what seems to be a collective message this week that quantitative easing is being put back in its box and interest rates are going up - and global markets are taking note.

* British Prime Minister Theresa May won backing for her policy programme with a slender parliamentary majority on Thursday in the first test of her authority after an election setback and growing pressure on her Brexit and austerity agenda.

* Gold premiums in India jumped to the highest level in 7-1/2 months this week as consumers advanced purchases to avoid paying higher tax when a new nationwide sales tax takes effect from July 1.

* Mali exported more than 16 tonnes of artisanally mined gold in the first four months of this year, the mines minister said on Thursday citing customs data, and is on track to export 50 tonnes for the year, equalling industrial output.

* The U.S. economy slowed less than feared in the first quarter due largely to a jump in consumer spending, providing a slightly more encouraging outlook for growth this year.

On gold market our suggestion of drop was correct as price indeed mismatch to bullish patterns that have been formed earlier in the week and makes them void. Overall price behavior hints on further downward continuation. Next downward target stands around 1222-1224 Fib level and Agreement area:

On 4-hour chart our AB-CD pattern is still valid, reaction on 100% target was moderate, no signs of reversal, very choppy price action. It mostly suggests further downside continuation as well. 1.618 AB-CD target stands at 1222 level:

On hourly chart after yesterday's drop, in fact, we have bearish pennant that also usually works as continuation pattern:

That's being said, right now definitely is not a moment to go long. Market shows clear signs of weakness.