GOLD PRO WEEKLY , August 21 - 25, 2017

[Sive Morten]

Fundamentals

(Reuters) - Gold prices were little changed after jumping to their highest in more than nine months on Friday as the dollar retreated on political uncertainty in the United States and a suspected Islamist militant attack in Spain boosted bullion's safe-haven appeal.

Spain mounted a sweeping anti-terrorism operation on Friday after a suspected militant drove a van into crowds in Barcelona, killing 13 people in what police suspect was one of a planned wave of attacks.

Spot gold touched its highest since Nov. 9 at $1,300.80 per ounce, and was up 0.03 percent at $1,287.95 an
ounce by 3:20 p.m. EDT (1920 GMT).

Pressuring gold, however, was the latest high-level shake up at the White House. U.S. President Donald Trump on Friday fired Stephen Bannon as his chief strategist, removing a powerful and controversial figure known for far-right political views.

U.S. stocks rebounded in a volatile session on Friday, while the dollar cut losses and bond yields rose to session highs after the news.

"The ouster of White House chief strategist Steve Bannon, who had been vilified perhaps more than anyone in the executive branch since Dick Cheney, put a tenuous floor on the stumbling stock market and blunted gold's charge above $1,300," said Tai Wong, director of base and precious metals trading for BMO
Capital Markets in New York.

"Gold and silver finish the day and the week largely unchanged looking for direction." Markets were also uncertain about Trump's ability to push ahead with policies after the disbandment of two high-profile business advisory councils over his remarks on violence at a rally in Virginia last weekend.

U.S. gold futures for December delivery settled at $1,291.60.

"The recent soft patch in U.S. data has put serious doubts over whether there will be another rate hike coming from the Fed this year," said Fawad Razaqzada, analyst at FOREX.com. "Unfortunately next week's economic calendar is quite light. Thus, the dollar may weaken further, especially against perceived safe haven currencies like the Japanese yen and Swiss franc, and potentially gold and silver."

Policymakers in Europe and the U.S. expressed concerns about unwinding monetary stimulus too soon.

Gold is sensitive to rising interest rates because they push up bond yields, increasing the opportunity cost of holding non-yielding bullion while tending to strengthen the dollar, in which gold is priced.

Spot gold faces resistance at $1,291 an ounce and could hover below this level or retrace towards support at $1,271 again, said Reuters technical analyst Wang Tao.

COT Report

Sentiment on gold market starts to change, at least now we see some changes. Thus, we know that net long position was growing for considerable period of time already, 4-5 weeks. However, open interest was dropping. It means that upside driver mostly was a short covering rather than new physical gold purchases. This also was indicated by SPDR fund stats.
Now, in last 2 weeks, we see that net long position continues to rise, and open interest has joined it. This is healthy situation that mostly points on real bullish sentiment on the market.

Situation on SPDR storages also has changed, but right now it is still unclear was it just single spike or this is really some new tendency:

Technical
Monthly

Monthly chart was barely impacted by recent price action as it was rather tight. So I will keep picture of our bearish scenario, but in the light of recent events, chances that it will be realized have diminished significantly. Trend has turned bullish again and it's really big chances that gold will break 1380 top. But as technically this has not happened yet - let's keep it for awhile as it stands right now.

Theoretically market still keeps double-sided setup as bullish as bearish patterns are not destroyed yet by price action. Crucial level for them is 1122 area. As we have discussed recently, upside scenario could lead market to 1330 YPR1 first and back to 1380 second, while bearish scenario you see on the chart...

As we talk about changes in sentiment last two weeks, let's take a look at alternative scenario on gold market, compares to what we've discussed previously. Scenario that we will talk about has not been formed yet and it has some degree of uncertainty as major levels that are crucial for this scenario, have not been broken yet.

In fact, our previous scenario on possible reverse H&S pattern is still valid. The breakeven point between these scenarios stands around 1120 lows. If Price will drop below it - gold siginficantly will increase chances on downside continuation.

It means that we could get either big Butterfly "Buy" pattern with potential target around 950$ or, at least "222" Buy around 1040 area on monthly chart . Until price stands above 1122 lows - there will be some uncertainty around them as gold also could form opposite pattern, we will take a look at it below. But breaking of 1122 will erase any questions...

Breaking of 1330 highs will cancel all questions on further direction of gold market:

Weekly

This was volatile week, but price almost has not changed by the end. As market is challenging this 1300 level for the 3rd time and this challenge also was not successful, chances on deep retracement have increased significantly and may be gold could start forming of right wing of our "upside" scenario...

In general weekly chart shows alternative scenario that stands in relation to the same 1122 lows. While market stands above this level - big butterfly "Sell" is possible, at least theoretically. It's first destination point stands at 1440.

As market already stands above 1278 area but still can't proceed to minor AB-CD target around 1330 - it makes us think that pullback is possible.

Although overall background for gold looks moderately bullish, but real upside breakout could be postponed for some time and start from lower levels.

Daily

Daily chart also brings nothing good to bulls, at least in short-term perspective. Recent action was clearly W&R of previous tops. Thus, stops have been hit and price returned back under this level. Gold alsmost has formed reversal candle.

May be it is too much to suggest deep action, but it seems that retracement to 1268-1270 K-support is really possible. Also we probably should forget for awhile about our butterfly setup here, as it was mostly based on real breakout issue, while we've got W&R instead.

Intraday

On 4-hour chart price action still stands in upside channel, but here also we have two bearish patterns. First one is divergence wth MACD, second - solid evening star candlestick pattern. Both of them suggest downward continuation. Channel support stands around 1276$ and it is interesting wether price will hold inside.

Also take a look that uspide aciton was held by MPR1. This fact tells that this is not new bull trend yet.

For second picture, I'll use 15-min chart, guys, as it shows picture better. Thus, here is clear H&S shape, although head is a bit overextended above 1.618 extension. Now market is tending to neckline. Definitely we will have butterfly "buy" around it, as we also have uncompleted 1.618 AB-CD head pattern right in the same area. Thus, to complete it, gold will need 1.27 butterfly pattern.

This area could be used for long entry by scalp traders with just small target around major 3/8 resistance as market has big chances to form downside continuation. So, we could get AB=CD pattern. It's interesting that target stands around the same daily 1270 area...

Conclusion

Long term charts keep valid two opposite scenarios with thrilling scale. The separate line between them is 1122 area. Although theoretically both are possible by far - recent global events and political affairs bring more chances on upside breakout.

In short-term charts situation slightly has changed, so before reversal gold could show a bit deeper retracement down as it has failed 3rd attempt to break 1300 area last 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 were a touch lower on Tuesday, pressured by an uptick in the dollar, with investors
focusing on tensions over North Korea and remaining cautious ahead of an annual central banking meeting in Jackson Hole later this week.

Spot gold had slipped 0.2 percent to $1,288.40 an ounce by 0333 GMT, after rising 0.5 percent in the previous
session. U.S. gold futures for December delivery edged down 0.2 percent to $1,294.20 per ounce.

"The U.S. and South Korea's military training will probably induce some move from North Korea. I think people are getting ready for any move so that's why gold came back up yesterday," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

The United States and South Korea began long-planned joint military exercises on Monday, heightening tensions with North Korea, which called the drills a "reckless" step toward nuclear conflict.

"The dollar is a bit stronger and that's why gold is coming off a bit. People are really kind of cautious about the market with this North Korea and U.S. situation and also the Jackson Hole meet later this week."

The dollar edged up against the yen on Tuesday, while the dollar index , which tracks the greenback against a basket of six major rivals, was steady. Investors are awaiting the Federal Reserve's annual central banking conference in Jackson Hole, Wyoming this week for clues on the outlook on monetary policy, with the European Central Bank chief Mario Draghi and Fed Chair Janet Yellen are set to speak.

"Geopolitics are still flashing on trader dashboards and they remain risk averse. The Jackson Hole meeting is the chief event for this, and it is pretty much safe to say that we are very dubious about getting anything new from the meeting, but still traders want to hedge their risk ahead of any unexpected outcome," said Naeem Aslam, chief market analyst at Think Markets.

"We do expect a mammoth move in the gold price if there is any kind of surprise from the ECB or the Fed," Aslam said.

Gold is highly sensitive to rising interest rates because they increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.

Spot gold may retest a support at $1,282 per ounce, as its correction from the Aug. 18 high of $1,300.80 has not completed, said Reuters technical analyst Wang Tao.

So, our setup on gold market needs just minor adjustment. On daily chart market has formed bullish grabber that suggests upside action and we need to keep an eye on whether it will be erased, or market will fail to drop further. Currently situation mostly suggests the latter, but who knows...
As market has formed W&R of previous tops and large shooting star pattern, it is reasonable to expect at least minor downside continuation. Thus, 1270 is a propriate area for this task:

On 4-hour chart price has fromed two side-by-side bearish grabbers. All other patterns are also in place - divergence and evening star:

Here is our 15-min chart. As you can see first stage of our trading plan has worked nice - upside action indeed has started on Monday as soon as butterfly and AB-CD pattern has been completed. The only difference is price has shown action not to 3/8 but to 5/8 resistance. But this makes no harm to overall H&S pattern. Now we need to keep an eye on AB=CD extension right to out 1272 target:

Now we need be very careful around neckline. If price will fail to break it down - daily bullish grabber could start to work and it could mean H&S failure and upside reversal. Right now price stands at culmination point.

 

[Sive Morten]

Good morning,

(Reuters) - Gold prices inched up on Wednesday as the dollar slipped after remarks by U.S. President
Donald Trump raised fears of a government shutdown, while investors awaited further direction from a key annual central banking conference this week.

Spot gold was up 0.1 percent to $1,285.30 an ounce by 0555 GMT, after shedding 0.5 percent in the previous session. U.S. gold futures for December delivery were unchanged at $1,290.90 per ounce.

The dollar edged down against the yen following President Trump's remarks.

"If we have to close down the government, we are building that wall," Trump told supporters at a rally in Arizona.

Elsewhere, markets were bracing for an annual gathering of central bankers at a meeting in Jackson Hole, Wyoming on Thursday and Friday, where Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on the outlook for monetary policy and interest rates.

"Most of the people are now looking for hints from the Jackson Hole meeting between the central bankers," said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "The most important thing is economic fundamentals...central banks are going to have tightening measures in monetary policies to have normalisation. So I don't have much higher upward momentum for prices," To said.

Draghi is also due to give a speech in Germany later in the day.

Higher interest rates could boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

"We could see gold possibly move higher...in light of concern that inflation data is running very much on the softer side of estimates," said INTL FCStone analyst, Edward Meir.

Spot gold may break a support at $1,282 per ounce and fall into a support zone of $1,270-$1,276, Reuters technical analyst Wang Tao said.

"On the other hand what has been supporting gold for the last six months or so is the risk aversion," Wing Fung's To said, referring to the uncertainty around the Trump administration in the U.S. in particular.

The United States on Tuesday imposed new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang's weapons programmes, but stopped short of an anticipated focus on Chinese banks.

Daily picture mostly stands the same. Yesterday we said that major event here is 1280 lows breakout, but gold has not shown it yet. Thus, bullish grabber on daily chart is still valid and may be it predicts some Wyoming meeting results, who knows... Whatever it will be, we just need to keep an eye on invalidation points:

On 4-hour chart price has reached channel support. Our evening star and bearish grabber patterns are still valid:

On hourly chart our H&S pattern is still valid, but price action a bit irrational for it. Normally, bearish action should accelerate in 2nd half of H&S, while here we see that it is becoming weaker. But, right now we probably have to accept this, as it could be due volatility around Jackson Hole meeting. There are also some technical reasons for this - neckline, channel support and AB-CD 0.618 target. But, if market will show any hints on upside thrust - it will be first bell of possible action above 1300, as any upside thrusts here breaks H&S nature.

 

[DevTrader]

GOLD testing the patience. Tomorrow may be it shows breakout either way during yellan speak.anyway closed short position is not worth to hold since Friday and no gain.

 

[Sive Morten]

Good morning,

(Reuters) - Gold nudged lower on Thursday, giving up some of its gains made after U.S. President Donald
Trump's threat of a government shutdown, with investors remaining focused on a major central bankers conference in Jackson Hole.

Spot gold was down 0.1 percent at $1,287.87 an ounce, as of 0410 GMT, after gaining 0.4 percent in the previous session. U.S. gold futures for December delivery slipped 0.1 percent to $1,293.30 per ounce.

"It's a bit lower with lack of catalysts and people trading sideways. It's going to be trading in a very tight range," said Richard Xu, a fund manager at China's biggest gold exchange-traded fund, HuaAn Gold.

"The market is pricing in the Federal Reserve's actions at the Jackson Hole meeting and people are expecting some kind of tightening going on in that space. So that's why gold is going to be under some kind of pressure."

Markets were focused on an annual meeting of central bankers in Jackson Hole, Wyoming starting Thursday, where Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on Friday, on the outlook for monetary policy and interest rates.

ECB's Draghi on Wednesday warned against hasty policy responses and said gaps in understanding the workings of new policies remain.

Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

The dollar inched higher on Thursday, paring some of the losses it suffered after U.S. President Donald Trump suggested a shutdown of the government was possible and threatened to terminate the North American Free Trade Agreement.

"Gold has already traded higher compared to a month ago so it's already priced in some of the uncertainty with regards to geopolitical concerns and even U.S. fiscal policy, so we think there's not much upside unless something unexpected happens," Xu said.

Spot gold may test a resistance at $1,294 per ounce, a break above which could lead to a gain to the next resistance at $1,297, Reuters technical analyst Wang Tao said.

Today gold shows clearer bullish signs. Daily bullish grabber is still valid and price starts to take shape of some kind of pennant pattern, which is potentially bullish:

Although on 4-hour chart all our bearish patterns are still valid, price action is too slow and gradual. This is not typical for a kind of patterns that have been formed here. It means that current price action is not quite natural and chances on upside breakout become stronger:

On hourly chart price consolidation as "right shoulder" looks too extnded and no neckline breakout has happened as on 1st as on 2nd attempts. That's why we start to suspect that we will not get any bearish action, but probably could get 1300 breakout on a background of Wyoming speeches....

 

[Sive Morten]

Good morning,

(Reuters) - Gold was unchanged early Friday, with investors awaiting directional clues from speeches
due later in the day at a gathering of central bankers in the United States.

Spot gold was unchanged at $1,286.48 an ounce by 0343 GMT, after dropping nearly 0.3 percent in the previous session. U.S. gold futures for December delivery were flat at $1,291.40 per ounce.

"Gold markets are basically in a holding pattern. They would be carefully scrutinising comments from the Federal Reserve and European Central Bank officials as to the their outlook for inflation, and resultant monetary policy stance," John Sharma, Economist at National Australia Bank said.

Fed Chair Janet Yellen and ECB President Mario Draghi are set to speak later in the day at the central bankers symposium in Jackson Hole, Wyoming. Although no new policy messages are expected from either,
investors will be watching for clues on outlook for monetary policy and interest rates. The world's top central bankers will meet with their confidence bolstered by a sustained return to economic growth that may eventually allow the European Central Bank and the Bank of Japan to follow the Federal Reserve in winding down their crisis-era policies.

Bullion is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. The dollar was buoyant against the yen on Friday as some participants bought back the currency to square positions ahead of the Jackson Hole meeting.

Preventing gold prices from retreating significantly were escalating geopolitical concerns, market participants said. "Political uncertainty remains high and continues to provide a strong level of support to prices. Trump's barrage of tweets during negotiations over the debt ceiling continues to fuel a level of uncertainty in the market," ANZ analyst Daniel Hynes said in a note.

President Donald Trump on Thursday picked a new fight with his fellow Republicans, saying congressional leaders could have avoided a "mess" over raising the U.S. debt ceiling if they had taken his advice.

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

Spot gold looks neutral in a range of $1,282-$1,289 per ounce, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.

Meanwhile, top consumer China's net gold imports via main conduit Hong Kong increased 2.3 percent in July from the previous month, data showed on Thursday.

On gold market situation barely has changed. In fact, as price action just stands flat - gold keeps valid all patterns, as bullish as bearish as no invalidation point has been broken so far.
Thus, on daily chart - our bullish grabbers are valid and price still stands in tight pennant pattern, which should be treated as bullish signs:

At the same time market keeps valid evening star and potential butterfly "Buy" - bearish patterns on 4-hour chart. It is amazing but minor bullish grabbers here are also valid:

As a result on hourly chart - our H&S and butterfly "Buy" alos are valid, and take a look, as price has not dropped yet below recent lows, market could form upside butterfly as well. So, whatever position you will take right now - it's all will be around a gambling. Although, IMHO technical picture has more bullish signs than bearish...