GOLD PRO WEEKLY , April 03 -07, 2017

[Sive Morten]

Fundamentals

(Reuters) - Gold notched a quarterly gain of about 8.4 percent on Friday, marking its best quarter in a year, as uncertainty over U.S. President Donald Trump's tax and investment plans and elections in Europe fueled
demand for bullion as a safe haven.

Gold rebounded from early losses as the dollar turned flat after a Federal Reserve official's seemingly dovish remarks and uninspiring data on the U.S. economy tamped down the sanguine mood from earlier this week.

Spot gold was up 0.4 percent at $1,247.4 an ounce at 3:48 p.m EDT (1948 GMT). U.S. gold futures ended the session 0.2 percent higher at $1247.30 an ounce. Earlier in the session, gold had dropped by the most in over than three weeks. It failed to break resistance at its 200-day moving average, triggering early technical selling.

The dollar index , which tracks the greenback against six rival currencies, was little changed from its late Thursday levels at 100.39. Backed by early-week gains, however, it is headed for its best week since mid-February.

An index of world stocks dipped on Friday as investors locked in profits, also boosting gold. Data showing the largest annual increase in U.S. inflation in nearly five years and comments by the president of the New
York Federal Reserve meanwhile reinforced expectations of U.S. interest rate hikes this year.

A stronger dollar makes bullion more expensive for holders of other currencies, while higher interest rates lead to higher bond yields and dampen demand for non-yielding gold. But gold is underpinned in the coming months by doubts over Trump's ability to enact tax cuts and investment spending and an uncertain political outlook in Europe. "The fear trade has driven the market so far this year," said David Govett at Marex Spectron. The buying as a haven from risk, plus a recovery in Indian buying, are likely to push prices to an average $1,259 an ounce this year, GFMS analysts at Thomson Reuters said in their Gold Survey 2017, published on Friday.

A failure by Trump to make progress on his stimulus plans would reduce the chances of a rise in U.S. interest rates in June, Tom Kendall at ICBC Standard Bank said in a note. "That in turn would likely give gold the impetus to break up through $1,300 again," he said.

COT Report

As on last week, CFTC data shows moderate bullish sentiment - speculative net long position increases 3rd week in a row. Open interest also shows light growth.

SPDR Fund storages also mostly stand flat and show no outflow, keeping overall bullish context by far:

Technicals
Monthly

As gold shows no return back to 1100 lows - it keeps reversal moment of our H&S pattern pretty nice by far. We've talked a lot about large patterns and far perspectives on gold market.

At this moment overall fundamental background looks supportive for gold market. Right now we see few factors that could support upside action in medium-term period.

First one is Fed policy. Fed will not hurry with rate increase and will not stifle US economy by too early agressive policy. They will support inflationary growth for some time and let economy to become hot a bit. Thus, major impact of Fed policy should come in 2018. This will let gold to ride on inflation for some time in 2017.

Second - multiple elections in EU brings a lot of uncertainty and works as supportive factor for gold market. Last 2-3 decades EU was totally depended on US policy and external governing of international policy. EU did the same as US and supports all start-ups that was needed to US, in any point of the Globe, although this was not neccesary to EU countries... Now sitation is changing.

Finally, recent inability of D. Trump to push through Congress rolling back process on Obamacare program also was a negative impact on USD. Now Investors have doubts - whether he will push through tax reforms and stimulus program. Last voting shows that D. Trump will have strong headwind even from his Republican nabours and this leads to appearing a lot of questions on perspectives of Trump's noted programs in tax cutting, fiscal stimulus and supporting of domestic production.

These factors could support gold market in medium-term period. Technical picture and sentiment analysis right now also show bullish signs.

Technically price behavior, short-term sentiment and commodities performance mostly supports idea of bullish reversal pattern here (at least now). At the same time many world top analysts (such as Barnabas Gan) worry about more active Fed policy and think that gold could finish 2017 around 1100$.
Still we have new input here - neutral comments on further rate hike. As Fathom consulting suggests - Fed will lead economy to become hot a bit before aggresive rate policy. This should open door for inflation growth, which is supportive factor for gold. Currently gold could stay on its own till June and this could encourage investors to be more brave in taking long positions.

Concerning farer perspective we could make just some suggestions. As we've said technically recent upward action started in Dec 2015 is first one after long term of decreasing and it should be interrupted by deep retracement sometime. Now this retracement stands in place. It is really big chance that gold stands in a stage of big trend changing from bearish into bullish. US economy shows inflation growing. As we've estimated, commodities across the board have turned to growth.

Besides, any Trump protection policy will be accompanied by big spending and expenses, this will lead to grow of inflationary expectations. Thus, we mostly gravitate to idea that gold now stands not in pause of bear trend, but on the eve of new bull trend. Also we expect big structural shifts in EU economy, diminishing Brussels governing role, taking direction on convergence with Russian economy, and through Russia economical infrastructure - with Middle East and Asia.

This is long political talk though, but shortly speaking, we see that the process of building new EU has started. First bell is Brexit. As you know all mature EU countries has started gold repatriation process that should be finished in 2020. So we should be oriented on this year as appearing of the shape of new EU. By gold repatriation process we could gudge on major idea of new EU - each country will out of external governing either Brussel or US and will make it's own policy according with their own national interests. This is how it should be in theory. How this process will develop on practice - we will see.

But our technical "deep" retracement still could be different. 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:

Weekly

Currently weekly chart does not bring something special. Overall picture looks bullish, trend stands also bullish. Bearish engulfing pattern mostly has completed it's target and we see strong upside bounce. Despite that this drop looks solid on daily chart - here this is just minor retracement to 3/8 Fib support.

Now here we have just trend context, it's bullish. But unfortunately gold here doesn't bring any more clarity on perspective. As deep retracement is possible in shape of some AB-CD, for example, as upward action is possible as well. Mostly it will depend on challenging of 1250 resistance. Now gold comes to it for 2nd time:

Daily

Last week price mostly stand in tight consolidation, and situation has not changed significantly. Even new monthly pivots for April stand approximately at the same levels. All our bullish issues that we've discussed in regular daily videos are still here and valid - bullish trend and hidden divergence with MACD.

On Friday we haven't got bullish grabber, but we still could get it on coming week, as MPP stands very close to price action and wasn't touched yet. Next upside target stands around 1282 area and market could formed upside butterfly to reach it:

Hourly

Hourly chart shows that gold has completed our trading plan during last week. As you can see butterfly has been formed, AB=CD was completed and all this happened right around K-support area. As it was rather strong support area market already has shown nice respect of this area by good upside action.

This is the reason why we allways try to take positions around such kind of levels. Because if even gold or any other market by some reasons will turn backward later - current upside action gives us chance to move stop to breakeven. Thus, if you've taken longs there, you could do it on Monday...

Others, who do not have longs yet will have to wait for more confidence. Actually we have bearish grabber on 4-hour time frame chart, that brings some risks. Although I'm not sure that it will work - we need some insurance. Thus, it would be better to wait for upside reversal swing - price action above 1255 area. This will prove market's strength and brings more confidence with upward continuation. If market will fail to form upside reversal swing, then downward retrecement could continue a bit more. Next target stands around 1230.

Conclusion:
In long-term perspective we think that bullish factors overhelm headwind of possible rate hike by Fed. Still this probably will lead to turmoil and excessive volatility, but we hope that this will happen with upside direction. Fed probably will let economy to become hot before they will start aggressive tightening, thus right now gold has some time, when investors could take longs without any fear be trapped by unexpected rate decision.

In shorter-term perspective this leads to appearing of some bullish signs on daily chart that we will check out on coming week.


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 prices hit one-week highs on Tuesday, buoyed by a weaker dollar on tepid economic data from the United States and as investors turned to safe-haven assets on worries over geopolitical tensions.
Spot gold had risen 0.2 percent to $1,255.51 per ounce at 0334 GMT, while U.S. gold futures were up 0.3
percent at $1,257.9.

Spot gold hit its highest since March 28 at $1,257.10. A measure of U.S. manufacturing activity retreated from a 2-1/2 year high in March amid a decline in production and an inventory drawdown.

"The data overnight gave some joy to gold investors. Weaker-than-expected numbers are supporting the view that the U.S. Federal Reserve is not going to raise rates more than a couple of times this year," ANZ analyst Daniel Hynes said.

Investor appetite for risk has been dulled this week by a number of factors, such as caution ahead of the upcoming meeting between U.S. President Donald trump and Chinese President Xi Jinping and a suspected suicide bombing in St. Petersburg, Russia.

"The critical uncertainty has been a big feature of buying in the gold markets and events overnight in Russia just emboldened the view and is continuing to support safe-haven buying," Hynes added.

"The market is starting to position itself for a potential break higher ... Net long positions in gold have started to peak again and investors are a little more bullish about the outlook."

Hedge funds and money managers raised their net long position in COMEX gold by 33,179 to 99,150 lots in the week to March 28, the highest in more than three weeks.

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, climbed 0.53 percent to 836.77 tonnes on Monday from 832.32 tonnes on Friday.

The dollar index , which measures the greenback against a basket of currencies, fell 0.1 percent to 100.490.
The dollar extended overnight losses and was down 0.3 percent at 110.58 yen after hitting 110.450, its lowest
in a week. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

So, gold market mostly confirms our suggestion on bullish scenario on daily chart. Now price is challenging natural 1260 resistance area. Our target for this week stands around 1278 area - major weekly Fib resistance, MPR1 and some extension targets:

On 4-hour chart we have intermediate 1261 butterfly as well:

Most interesting for us is hourly chart still, as we've got an anwer on our yesterday concern - whether gold will go up immediately. Now you can see that upside reversal swing has been formed and this brings more confidence with upward continuation. Next our target stands around 1261 area. Any retracement on a way up will be small, as major retracement already has happened on Friday and gold now stands in extension mode. That's why, if you would like to take long position - watch for nearest Fib supports:

 

[Sive Morten]

Good morning,

(Reuters) - Gold prices held firm on Wednesday near a one-month high hit in the prior session, as appetite for riskier assets eased ahead of a meeting between leaders of the United States and China. The market is looking for cues from the minutes of Federal Reserve's March meeting expected to be released later in the
day.

Spot gold was steady around $1,255.12 per ounce by 0332 GMT. U.S. gold futures inched down 0.1 percent to $1,257.10. Spot gold on Tuesday hit its highest since Feb. 27 at $1,261.15, but failed to close above its 200-day moving average, a significant resistance, for the third time this year.

"This reflects the market's uncertainty about the trend of the gold price in the near term," said Jiang Shu, chief analyst at Shandong Gold Group. "Whether the Federal Reserve would raise rates in June conference is not very certain. The market is waiting for more economic indicators from the U.S and speeches from Fed officials to assess the probability of rate hike in June."

The Fed raised interest rates in March and has indicated at least two more hikes this year. Gold prices, however, have only risen nearly $60 since the rate hike in March as worries over U.S. President Donald Trump's polices and elections in Europe have increased the metal's safe-haven appeal.

North Korea fired a ballistic missile on Wednesday from its east coast into the sea off the Peninsula, South Korea's military said, ahead of the summit between the United States and China. When U.S. President Donald Trump meets Chinese President Xi Jinping on Thursday and Friday, the event will be marked not
only by deep policy divisions but a clash of personalities between America’s brash "tweeter-in-chief" and Beijing's cautious, calculating leader.

Asian stocks rose on Wednesday though the underlying sentiment was still cautious with investors wary of taking big positions ahead of the meeting. "The markets are waiting for the conference between the most
important leaders in the world ... If it does not turn out in a positive way, we might see a weak U.S. dollar and rising gold price," Shu said.

Spot gold may retest a resistance at $1,261.03 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, Reuters technical analyst Wang Tao said.

So, on gold market price challenges 1260 resistance. At brief look today we have bearish sign - minor W&R, but in reality this is technical issue, that has no relation to weakness.

If you remember, yesterday we've talked on hourly AB-CD 1.618 target. Thus, gold has completed it and current pullback stands in relation to this moment. Also 1260 is WPR1 area. So, current retracement is absolutely normal.

Also yesterday we've come to conclusion that retracement should not be deep. It means upward action should be re-established either from 1254 level or 1251 K-support. Keep an eye on 4-hour chart. If we will get bullish grabber here, then upward action could start immediately:

 

[Sive Morten]

Good morning,

(Reuters) - Gold prices held firm on Thursday on the back of a weaker dollar as appetite for risky assets like
equities waned ahead of a potentially tense meeting between U.S. President Donald Trump and his Chinese counterpart.

Spot gold was mostly unchanged at $1,254.06 per ounce by 0324 GMT. U.S. gold futures climbed as much as 1 percent to $1,260.80 and were last up 0.6 percent at $1,256. Investors were cautious ahead of the meeting between Trump and Chinese President Xi Jinping due later on Thursday, the first between the world's two most powerful leaders.

Topping the agenda at Trump's Mar-a-Lago resort in Florida will be whether he makes good on his threat to use U.S.-China trade ties to pressure Beijing to do more to rein in its nuclear-armed neighbour North Korea.

"Gold is bid partially because of the risk aversion and also because the dollar is at pressure against the yen," said Jeffrey Halley, senior market analyst at OANDA. "But, it just hasn't shown any ability to break the 200-day
moving average and clearly shows that the price action is not being driven in isolation but has been driven by the U.S. dollar," Halley said.

"It is kind of looking like gold is running out of steam in the short term." Lingering fears of a possible trade war kept Asian markets on edge. The dollar index , which measures the greenback against a basket of currencies, fell 0.1 percent to 100.470.

U.S. Federal Reserve's March minutes on Wednesday showed most policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up.

Falling equities, driven by the Fed's hawkish tone, have supported gold and should prices decisively move above the 200-day moving average, more quantitative money could start coming in, said INTL FCStone analyst Edward Meir.

"A plethora of troubling geopolitical events, along with the upcoming French elections, still percolate in the background and have the capacity to provide an element of support to gold, at least over the short term."

Spot gold may rise to $1,265 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, Reuters technical analyst Wang Tao said.

On daily gold market we do not see big changes. Yesterday on a bit dramatic action on ADP report we've got bullish stop grabber, that suggests taking out of 1261 tops. All other things stand the same as we've discussed previously:

On 4-hour chart our yesterday small butterfly has been erased and price has turned to sideways action here. ADP report has led to appearing of nicely looking morning star candlestick pattern. It means that minor pullback that we see right now should be treated as retracement:

Upside breakout could take the shape of butterfly on hourly chart. I'm not sure that we will get to 1280 directly, but complete 1265 target is possible till the end of the week:

 

[fgdong]

Thanks!

 

[Sive Morten]

Good morning,

(Reuters) - Gold rose more than 1 percent on Friday to a 5-month high as investors sought safe-haven assets after the United States launched cruise missiles on a Syrian air base, potentially escalating tensions with Syrian allies Russia and Iran.

U.S. President Donald Trump unleashed military strikes against the air base in response to a deadly chemical attack on a rebel-held area, a U.S. official said on Thursday.

Trump took the toughest direct U.S. action yet in Syria's six-year-old civil war, raising the risk of confrontation with Russia and Iran, Assad's two main military backers.

Spot gold rose 1 percent to $1,264.30 per ounce by 0340 GMT. It earlier climbed as much as 1.4 percent to $1,269.28, its highest since Nov. 10, and was on track for a fourth straight week of gains.

U.S. gold futures also rose over 1 percent to $1,266.20.

"Clearly this raises the stakes and we expect to see gold prices continuing to push higher in the short-term, at least until there is some clarity around whether this is a one-off or develops into something more," ANZ analyst Daniel Hynes said.

Stocks slumped and safe-haven bonds and the yen jumped in Asia on Friday after the missile strike.

The dollar fell 0.4 percent against the safe-haven Japanese yen to 110.40.

Investors had already been on edge as Trump met Chinese leader Xi Jinping on Thursday for talks over flashpoints such as North Korea and China's huge trade surplus with the United States.

"My initial thoughts are the new president (Trump) is sending a big message to the Chinese about their willingness to act on North Korea as well with this strike," said Jeffrey Halley, senior market analyst at OANDA.

Besides the risk-aversion sentiment in the market, gold is also supported by technicals, analysts said.

"Gold has broken the 200-day moving average intra-day and has tested its upper resistance at $1,264, the February 28th high. A daily close above these levels can open a technical move to $1,300 with support now at $1,250," Halley said.

Spot gold is expected to break a resistance at $1,273 per ounce and rise more to the next resistance at $1,281, as suggested by its wave pattern and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao.

Investors will watch out for March U.S. non-farm payrolls data due later on Friday, which analysts say could be key for the short-term direction of the gold market.

Strong job gains will likely add upward pressure on wages, supporting higher interest rates, which could pressure gold. Higher interest rates reduce investor appetite for non-interest bearing gold.

Although major driving factor was unpredictable but it has helped us to complete our yesterday setup. In general, if NFP will be not as good as expected, gold could complete our daily target around 1280 area even today:

Our sideways consolidation has been broken up after moring star pattern has been completed. Now price stands above it and doesn't return back inside the consolidation, which is bullish sign. Classical way of target estimation brings the same 1281 point:

Hourly chart suggests further upside continuation to 1.618 butterfly target as upside acceleration was really fast. Also we have here other multiple AB-CD's. Upside momentum is rather strong, bombing just has happened, that's why it probably will drive the market today as well. Now, all eyes on NFP. Flat or poor numbers will push gold higher and even could let to complete daily 1281 target: