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GOLD PRO WEEKLY, September 18-22, 2017

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Sep 17, 2017.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Fundamentals

    (Reuters) - Gold prices fell on Friday after a European Central Bank (ECB) official called for scaling back the bank's stimulus program, although losses were capped when weaker-than-expected U.S. economic data raised questions about further interest rate hikes.

    ECB board member Sabine Lautenschlaeger made the most explicit call so far from an ECB policymaker for paring the bank's 2.3 trillion euros money-printing program.

    "For gold this is bad news because this continues the trend of the market pricing in the normalization of monetary policy," said Jens Pedersen, senior analyst at Danske Bank in Copenhagen.

    But he said there had already been plenty of headlines about the ECB planning an exit from its bond buying and the U.S. Federal Reserve reducing its balance sheet after its big quantitative easing program.

    Spot gold was down 0.6 percent at $1,321.88 an ounce by 1:47 p.m. EDT (1747 GMT). It was down 1.8 percent for the week, on track for its biggest weekly decline since early July. U.S. gold futures for December delivery settled down 0.3 percent at $1,325.20.

    Those "normalization" actions by central banks tend to pressure gold. Gold briefly pared losses on news that U.S. retail sales unexpectedly fell in August and industrial output dropped for the first time since January, in contrast to Thursday's strong U.S. inflation data.

    Gold largely shrugged off North Korea's firing of another missile over Hokkaido, Japan. "Markets are paying much more attention to global economic data," said Rob Haworth, senior investment strategist at U.S.
    Bank Wealth Management in Seattle. "The synchronized global growth story is gaining momentum
    and the uptick in inflation seems to mean that the Fed has plans to make their planned moves."

    The Fed's two-day monetary policy meeting begins on Sept. 19. Commerzbank said August gold imports into India, the world's second biggest gold consumer, were the lowest so far this year. In other precious metals, platinum's discount to gold fell to around $360, the lowest according to Reuters data dating back
    to 1985.


    Here guys, some brief look at possible results of Germany elections. Currently no surprises are expected, which should be positive for EUR. Thus let's keep in mind poll results and just watch how different real data will be in relation to polls. Most attention should be given to AfD that is becoming more popular in recent couple of years as many Germans are not happy with Merkel immigration policy and high degree of depending from US in political questions, including Russian sanctions.

    Could the German election deliver a surprise result?
    By HiFX
    With a political system designed to ensure balance and stability, German politics tends to remain fairly free from surprises. Despite doubts about the reliability of opinions polls after the unexpected election results in the UK and USA recently, it is reasonable to expect German politics to remain relatively uneventful. But with national elections due to be held on 24th September, there is some uncertainty on the German political scene.

    How does it work?

    Germany’s complex voting system aims to balance a desire for choosing a local candidate with a system of proportional representation to ensure that parties are represented according to their vote share. As a result, it is rare for a party to win with an absolute majority and they are usually required to form coalitions.

    One of the most common scenarios is the current coalition between Germany’s two largest parties, the centre-right Christian Democratic Union (CDU) and the centre-left Social Democratic Party (SPD). Recent coalitions have also involved the liberal Free Democratic Party (FDP) and the Greens.

    But if smaller populist parties such as the Left party or the Alternative for Germany (AFD) rise in popularity, it could cause complications for coalition negotiations.

    Can Merkel win a fourth term?

    The CDU is currently in power, as it has been for much of the time since World War Two, often with the support of its Bavarian sister party, the Christian Social Union (CSU). Its leader, Angela Merkel, has been Chancellor of Germany since 2005. If she is successful in September, she would be only the second Chancellor to serve four terms in post-war times.

    For much of that time, Merkel has enjoyed very high approval ratings. Her ratings dipped in late 2015, when she welcomed around a million asylum seekers into Germany. However, recent figures suggest she is regaining popularity, perhaps because she is viewed as a safe pair of hands in an uncertain global political climate.

    Could Schultz revive SPD’s fortunes?

    The SPD’s candidate for Chancellor is Martin Schulz, the former president of the European Parliament. A well-known supporter of the EU, he has pledged to pursue the creation of a United States of Europe if he gains power.

    Despite an initial surge in popularity, Schultz was dealt a serious blow by Merkel’s CDU in May’s state elections in the historic SPD stronghold of North Rhine Westphalia. The CDU’s victory there was widely seen as a suggestion that Merkel’s popularity could be strong enough to take her to a fourth term as Chancellor.

    Will anti-EU sentiment be reflected in the polls?

    Both the CDU and the SPD want to strengthen relationships within the European Union. This follows on from the recent election of Emmanuel Macron, who describes himself as pro-European but believes that reform is required within the EU. Both Merkel and Schultz are keen to be seen as the candidate who can provide stability in Europe on a “Franco-German axis”.

    Nearly all of the main parties in Germany are pro-European and support some degree of further European integration. The main exception is the AfD. Founded as an anti-Euro party in 2013, it has more recently turned its attention to immigration and Islam. This approach helped to boost its popularity in 2016, when Angela Merkel’s immigration policy was under scrutiny, but appeared to lose this momentum in early 2017. Nevertheless, with MPs in nine of Germany’s 16 state parliaments, the AfD is hoping to acquire its first seats in the national government this year.

    Recent opinion polls place the parties as follows:

    • CDU/CSU: 38.4%
    • SPD: 24%
    • Left: 9.2%
    • AfD: 8.5%
    • FDP: 8.2%
    • Green: 7.3%
    This suggests that the CDU is likely to be the largest party following the election. But the country’s intricate system of proportional representation means that the smaller parties could hold significant influence in securing a coalition, a process that can take several weeks.

    What does this mean for the Euro?

    Elections in general tend to cause uncertainty, which can have a weakening effect on a currency. Earlier this year, the Euro dropped against the Pound and the US Dollar in the run-up to the French election, but strengthened again when Macron won against Marine Le Pen. It is possible that we could see similar volatility as the German election draws closer, particularly if there is uncertainty around potential coalitions.

    COT Report

    Recent CFTC data doesn't show yet all the pressure on gold that is announced. Actually it still shows normal bullish sentiment - net long position and open interest are growing. Still, total position is coming closer to ultimate levels and that could be a barrier for further upside action in futures. But right now sentiment analysis shows nothing bad for gold market.
    Still we should be on guard as indeed, coming events could make an impact on gold market. As we see nothing serious and sentiment is not changing yet, we will treat recent action as retracement by far:
    upload_2017-9-17_13-32-33.
    Technical
    Monthly


    Nothing significantly has changed yet on big picture. Price just step up a bit out from the top of September. All other things stand mostly the same.

    As market has shown strong close on August, we probably could put aside our bearish scenario for awhile. If gold will start to show strong bearish action again, we will return back to it. But right now upside scenario has more chances to happen.

    On July and August we have tail close. Right now market has reached solid resistance area around 1330. It already has been tested once, but it is still valid. This is not just 3/8 major monthly Fib level. This is also Yearly Pivot Resistance 1 and 0.618 AB-CD target. Right now market still stands close to it.

    Next major target will stand around 50% Fib level and Agreement, as it coincides with AB=CD objective point as well. Market could take the shape of butterfly to get there. 1.27 extension also stands in the same area:

    gold_m_18_09_17.

    Weekly

    Weekly picture is very important as for bulls as for bears. So, market finally has broken through 1295 area that it was challenging since the beginning of the year. Trend stands bullish on weekly chart and price is not at overbought by far. In fact, guys, gold market doesn't have any significant resistance till the next 1380 target, which is strong monthly level.

    Here we have two AB-CD patterns of different scale. First one is large monthly AB-CD that we've mentioned above and this is 0.618 target that has been hit at 1326$.

    Second AB-CD is a minor one and it stands inside CD leg of larger one. Right now we hear a lot of forecasts on gold's weakness, some of the we've put in previous research - it's an opinion of Goldman Sachs and Morningstar. But we also have here technical pattern that could encourage bears. This is possible large weekly "222" Sell that will be formed as soon as price will complete our smaller AB-CD pattern.

    Still, right now we see a bit late reaction on our 1330 area. It should happen earlier as market 2 weeks ago has reached this area and completed 1326 target, but probably due significant geopolitcal tensions around N. Korea and other stuff, it was postponed. Now it seems that some reaction has started, well later is better than never. As this is just minor AB-CD target and price is not at OB, reaction should not be too deep. Thus, right now we could watch for 1285-1300 area:
    gold_w_18_09_17.

    Daily

    So, we're returning back to the same picture that we've talked about last week. Trend is bearish here. As upside reaction on 1316 support area was finished, price continues downside action. Actually, on Friday gold almost has formed reversal session - as it has moved above the high and closed rather deep, although not below previous lows.

    Here we still watching for some deeper retracement. Probably some kind of AB-CD action should be formed here to 1300 target:
    gold_d_18_09_17.

    Hourly

    Here we have a shape of potential H&S pattern that we've discussed on Friday. Theoretically price still stands relatively close to the level where theoretically the bottom of right shoulder should be. At the same time, overall price action mostly shows irrational behavior for H&S. Here is clear some bearish pressure exists and this is not typical for last stage of bullish reversal pattern. It means that there are big chances that H&S pattern will fail.

    As market already has shown response to 1316 Fib support area, it shows downside continuation. As price is not at OS on daily chart, it could proceed to next strong support around 1300 area.

    Since gold has failed to re-establish upside bounce from 1323 level, where it should to, it means that chances on upside AB-CD significantly diminished. If H&S will fail, we could get 1.618 3-Drive Buy pattern, as 1.618 extension of recent retracement stands precisely around 1300 area:
    gold_1h_18_09_17.

    Conclusion

    Long term perspective of gold market looks positive. Although crucial price levels have not been broken yet, but overall performance looks good.
    In shorter term perspective due some fundamental and geopolitical events previous driving factors are exhausted a bit. Thus, retracement should be deeper and first level that we will watch for is 1300 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.
     
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  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold on Tuesday inched up from its lowest in over two weeks as the dollar shed some of its gains from the previous session, with market focus on a two-day Federal Reserve meeting that kicks off later in the day.

    FUNDAMENTALS
    * Spot gold was up 0.2 percent at $1,308.86 an ounce by 0044 GMT, after dropping to its lowest level since Aug. 31 at $1,304.10 in the previous session. U.S. gold futures for December delivery edged up 0.1 percent to $1,312.60 an ounce.

    * The dollar index , which measures the greenback against a basket of currencies was down 0.1 percent at 91.924. It eased 0.1 percent versus the yen after marking its highest since July 27 overnight.

    * Asian shares wavered on Tuesday, bolstered by record highs on Wall Street but hobbled by uncertainty as traders waited on the Fed meeting for clues on U.S. monetary policy.

    * The Fed is set on Wednesday to announce the start of a plan to trim its $4.5-trillion portfolio of assets, much of it amassed in response to the 2007-2009 financial collapse, marking another milestone in bringing to an end the crisis-era measures.

    * Bank of England Governor Mark Carney said on Monday that Brexit is likely to hurt Britain's growth prospects in the short term and push up inflation as the country adjusts to life outside the European Union.

    * Euro zone headline inflation hit its highest level in four months in August, official data showed on Monday, confirming the European Union statistics office's earlier flash estimate.

    * The U.S. military staged bombing drills with South Korea over the Korean peninsula and Russia and China began naval exercises ahead of a U.N. General Assembly meeting on Tuesday where North Korea's nuclear threat is likely to loom large.

    * Chinese President Xi Jinping and U.S. President Donald Trump spoke about keeping pressure on North Korea with economic sanctions imposed through the United Nations, the White House said in a statement on Monday.

    * SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.63 percent to 843.96 tonnes on Monday from 838.64 tonnes on Friday.


    So, on gold market our suggestion was mostly correct and market indeed has dropped yesterday to 1303 area. On daily chart it means that 1316 has been broken and next major destination point stands at 1295-1300 daily K-support, MPP and OS.
    Right now price shows minor response to daily OS area. This probably should be just some kind of flat standing, hardly we will get any meaningful upside bounce here:
    gold_d_19_09_17.

    On 4-hour chart our 1.618 extension target has been met. Price is taking the shape of downside channel here. Lower border also stands around 1300:
    gold_4h_19_09_17.

    So, currently it is not good situation to go long, as market has not reached major support and has not formed any bullish reversal patterns. It seems that first area where we could get something of this sort is daily K-support area.
     
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
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    Good morning,

    (Reuters) - Gold was steady on Wednesday, with investors in wait-and-see mode ahead of the outcome of a two-day Federal Reserve meeting in the United States.

    FUNDAMENTALS
    * Spot gold was flat at $1,310.93 an ounce at 0039 GMT. U.S. gold futures for December delivery were up
    0.3 percent to $1,314.40 an ounce.

    * SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.25 percent to 846.03 tonnes on Tuesday from 843.96 tonnes on Monday.

    * The dollar was steady versus the yen and against a basket a currencies early on Wednesday. Asian shares were mostly steady after Wall Street closed at record highs. U.S. Treasury yields rose slightly on Tuesday as investors waited on the conclusion of the Fed's two-day policy meeting on Wednesday for new indications on whether an additional interest rate hike is likely this year.

    * U.S. President Donald Trump escalated his standoff with North Korea over its nuclear challenge on Tuesday, threatening to "totally destroy" the country of 26 million people and mocking its leader, Kim Jong Un, as a "rocket man".

    * European Central Bank policymakers disagree on whether to set a definitive end-date for their money-printing programme when they meet in October, raising the chance that they will keep open at least the option of prolonging it again, six sources told Reuters.

    * The mood among German investors improved more than expected in September as worries about the stronger euro faded, suggesting that markets expect Europe's biggest economy to continue its solid performance in coming months.

    * U.S. homebuilding fell for a second straight month in August as a rebound in the construction of single-family houses was offset by persistent weakness in the volatile multifamily home segment.


    Gold market shows rather flat action as D. Trump speech has not impressed markets and all eyes right now stand on Fed. As a result, market shows flat and slow upside retracement. Still, we think that it should be more logical if market will reach 1300 major support area here. Thus, we do not know what will happen on Fed and do not want to anticipate it, but technically downside continuation looks natural:
    gold_d_20_09_17.

    On 4-hour chart market still shows slow reaction on daily OS and intraday target:
    gold_4h_20_09_17.

    It seems that most probable destination today is former 1316 daily support, that right now becomes and Fib resistance. Also this level coincides with upper boarder of the channel and 1.618 AB-CD target. Probably market should reach it closer to the end of the session and at the eve of Fed meeting. May be right from there downside action will continue:
    gold_1h_20_09_17.
     
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold fell to its lowest level in over three weeks on Thursday as a stronger U.S. dollar and the
    increasing likelihood of another Federal Reserve interest rate hike this year curbed demand.

    FUNDAMENTALS
    * Spot gold was down 0.2 percent at $1,298.61 an ounce at 0054 GMT, after earlier dropping to lowest since late August at $1295.65. U.S. gold futures for December delivery lost 1 percent to $1,302.10 an ounce. The U.S. dollar shone while Asian shares slipped slightly on Thursday after the U.S. Federal Reserve announced a plan to start shrinking its balance sheet and signalled one more rate hike later this year.

    * The U.S. Federal Reserve left interest rates unchanged on Wednesday but signaled it still expects one more increase by the end of the year despite a recent bout of low inflation.

    * The Fed will reduce its bond holdings evenly across the maturities of Treasury bonds and, on mortgage bonds, it will continue to focus reinvestments on 15- and 30-year securities.

    * The Bank of Japan is expected to reassure markets on Thursday that it will lag well behind its U.S. counterpart in scaling back its massive stimulus, as an improving economy has yet to boost inflation anywhere near its elusive 2 percent target.

    * The euro's appreciation reflects a stronger euro zone economy, supporting calls for the European Central Bank to move away from its unprecedented stimulus policy, ECB rate-setter Klaas Knot said on Wednesday.

    * The Bank of England will raise interest rates for the first time in a decade at its next meeting, a Reuters poll of economists showed on Wednesday, with a large majority saying such a move would be a mistake.

    * U.S. allies said on Wednesday that enforcing international sanctions on North Korea, and not mere dialogue, was the key to getting Pyongyang to give up its nuclear weapons.


    Gold market finally has reached our strong daily support 1290-1300 area. Today-tomorrow it probably should move down a bit more to 1285 area, but next week odds suggest reasonable bounce out from this area, as support indeed looks solid. It is still unclear whether this bounce will be just retracement and part of large AB-CD to 1260, or upside continuation, but, anyway, bounce will be ~30$, and this is significant for daily/intraday scales:
    gold_d_21_09_17.

    On 4-hour chart price still stands inside downside channel and forms AB-CD pattern. Its target @ 1285 is an area where some bullish reversal patterns could start forming as response to daily support area:
    gold_4h_21_09_17.

    On hourly chart we see nothing special yet, downside action has started precisely from 1315 Fib resistance as our minor 1.618 AB-CD pattern has been completed:
    gold_1h_21_09_17.

    That's being said, today we probably should wait for completion of AB-CD 1285 target and then we will watch for possible bullish reversal patterns that could trigger retracement on daily chart.
     
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,

    (Reuters) - Gold edged up from a four-week low on Friday as the latest twist in tensions between the United States and North Korea prompted investors to seek out the safe-haven asset.

    FUNDAMENTALS
    * Spot gold was up 0.2 percent at $1,293.70 an ounce at 0042 GMT, after marking its lowest since Aug. 25 at $1287.61 in the previous session. U.S. gold futures for December delivery were up 0.1 percent at $1,296.60 an ounce. * The dollar on Friday eased versus the yen and against a basket of six major currencies .

    * U.S. President Donald Trump ordered new sanctions against North Korea on Thursday and Pyongyang's leader defiantly vowed to persist with its nuclear and missile programmes and said it would consider measures against the United States.

    * North Korea's leader Kim Jong Un said in a rare statement on Friday the North will consider the "highest level of hard-line countermeasure in history" against the United States in response to U.S. President Donald Trump's threat to "totally destroy" the North.

    * The number of Americans filing for unemployment benefits unexpectedly fell last week, but the near-term outlook for the labour market was muddied by the continuing impact of Hurricanes Harvey and Irma.

    * Euro zone economic growth is gaining momentum and the rapid fall in the unemployment rate is encouraging but inflation has yet to show convincing signs of a sustained upward trend, requiring continued stimulus, the European Central Bank said on Thursday.

    * Monetary policy is not the right instrument to address financial imbalances in the euro zone and macroprudential tools must be used to tackle local issues, European Central Bank President Mario Draghi said on Thursday.

    * The BOJ held monetary settings steady at a policy review on Thursday and asked markets to have faith that inflation will hit its elusive 2 percent goal.

    * China's central bank has told banks to strictly implement United Nations sanctions against North Korea, four sources told Reuters, amid U.S. concerns that Beijing has not been tough enough over Pyongyang's repeated nuclear tests.

    * Holdings of SPDR Gold Trust rose 0.73 percent to 852.24 tonnes on Thursday from 846.03 tonnes on Wednesday.


    On gold market as price has met strong daily support, upside retracement has started. So, currently it is difficult to say either we will get "V" bottom action and market will continue long-term bull trend or, bounce will be just "BC" leg of greater bearish AB-CD to 1260 support. Now we're mostly interested in starting point of this bounce up:
    gold_d_22_09_17.

    On 4-hour chart our AB-CD pattern mostly has been completed, but not quite - it's lack to meet it for 3 bucks. It means that although some upside action is started - price could form some bullish reversal pattern on lower time frame:
    gold_4h_22_09_17.

    On hourly chart we do not have any bullish patterns yet, but have bearish one instead. Here is minor "222" Sell pattern has been formed. It means that, it's at least not good moment to go long. May be this pattern will trigger final leg down which complete our 4-hour AB-CD:
    gold_1h_22_09_17.

    That's being said, some upside bounce probably should happen, but not yet. Thus, if you're looking for long position here, wait a bit more, until price will form clear bullish reversal pattern.
     
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