GOLD PRO WEEKLY , June 05 - 09, 2017

[Sive Morten]

Fundamentals

(Reuters) - Gold prices rose to a six-week high on Friday after disappointing U.S. non-farm payrolls data weighed on the dollar and lowered some expectations for more aggressive U.S. interest rate increases
this year.

Data showed that U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum. A slow recovery in the world's biggest economy dents the likelihood for higher interest rates which benefits non-interest yielding and safe-haven gold.

Spot gold was up 1 percent at $1,277.76 per ounce by 3:34 p.m. EDT (1934 GMT), after hitting its highest since April 21 at $1279.10 and was headed for its fourth week of gains. U.S. gold futures ended the session up 0.8 percent at $1,280.20 an ounce.

"You had that non farm payrolls number that surprised everyone so at this point it looks like the market wants to continue higher," said Joshua Graves, markets strategist at RJO Futures. "I feel like $1,300 is probably going to be the next stop ... At this point with the market getting a little bit toppy up here, I think you're seeing a little bit of a flight to safe haven assets."

Expectations for stronger jobs data and upbeat data from U.S. factory activity had pushed gold to a one-week low earlier on Friday.

"There is good room to fall back to $1,200 within the next three months," Dominic Schnider at UBS Wealth Management in Hong Kong, said. "The world economy is still in good shape, people are risk-on, inflation is leveling off, there is no real big inflation threat anymore, policy is normalising still."

However, the upcoming June 8 elections in Britain and more political unrest possible in the U.S., North Korea, Greece, Venezuela, and Brazil is likely to keep bids in bullion, seen as a safe haven asset, analysts said.
Polls have shown varying likelihoods of British Prime Minister Theresa May winning the election. The latest polls all show the Conservatives' lead narrowing, but the advantage ranges from three to 12 points, causing uncertainty in markets.

In other markets, U.S. stocks advanced to record levels for a second straight session while the dollar dropped to seven-month lows, making gold less expensive for holders of other currencies.

COT Report

Last week CFTC data was released on Tue, before NFP data and it shows some short covering action. As you can see on the chart - net speculative long position has increased while open interest has dropped slightly. In general this support moderately bullish sentiment on gold market. It will be interesting to see how speculative position will change after NFP:

Technicals
Monthly

So, guys, as we've talked many times already - gold way will not be streight. We still keep bullish view on gold market. 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 last time will be in June. And recent poor NFP data is additional confirmation of this view. 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.

Finally, we have new feature here - bullish stop grabber. It suggests action above recent 1295 top. In this case road to YPR1 around 1330 will be open - this is our next short-term target:

Weekly

Last week price has continued upward action. Trend stands bullish here, market is not at overbought. The nearest target that we have here is 0.618 extension of big AB-CD pattern and it coincides with YPR1 around 1330 area.
Appearing of bullish grabber on monthly chart brings significant assistance to us, as we could focus only on recent upside swing to for trades planning.

Overall picture stands bullish in larger perspective as well. Here we see upside breakout of downside channel and re-testing it later. As retracement already has happened, current upward action should be treated as upside extension stage... Potentially current price action could take the shape of butterfly with ultimate 1550 target, if our monthly H&S pattern will work. Right now it is a bit early forecast, but we should keep an eye at this possibility still.

Daily

So, on daily chart gold shows classical bullish action, as we've discussed in our videos - broken pennant has been re-tested and upside action has continued. But this is only half way. To keep bullish tendency gold has to form higher top, and theoretically this should lead us precisely to our 1330 target.

On coming week gold could complete minimal target of grabber and reach 1300 area as price already has broken all meaningful resistance levels and it is not on overbought. It means that gold has "free" space till the top. Precisely around 1300 area we have MPR1 and OB level.

And the last one... as re-testing of pennant already has happened - market should continue upward action and not return back to keep normal bullish behavior. It means, that on coming week all retracement should be mild, and mostly stand inside Friday's upside swing:

4-hour

This time frame provides all information that we need for trading on coming week. Trend is bullish here as well. There are just two levels that could be treated as acceptable retracement, without any harm to bullish scenario. They are first 1271 level+ WPP and 1266 K-area + WPS1.

As price already has broken widening triangle up - pullback to 1271 area (i.e. first level wherever it will appear) is more attractive. Second level is acceptable, as on bullish trend price very often retraces to WPS1.

1255$ is crucial area. It includes trend line of broken pennant and another K-support. If price will drop below it then short-term bullish scenario will be destroyed.

Conclusion:

Thus, we still keep bullish view on gold in 2017 and we have two long term target at 1330 and 1380 area.

Short-term gold sentiment turns bullish again. Next target stands at 1300 area. Retracements, if any, should be mild as price already has re-tested broken daily pattern.


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 touched its highest in more than six weeks on Tuesday as Asian stock markets and the U.S. dollar weakened ahead of a UK national election and a European Central Bank meeting scheduled for Thursday.

Also on Thursday, James Comey, former head of the U.S. Federal Bureau of Investigation, is due to appear before a Senate committee for the first time. Comey was fired by President Donald Trump in May while leading a probe into alleged Russian meddling in last year's U.S. election. The events all have the potential to boost the safe-haven appeal of bullion, which is often used as an investment option during times of political and financial uncertainty.

"Much will, of course, depend on the U.S. dollar. However, with event risk in the form of this Thursday's ECB rate decision and the UK general election, one would expect the safe haven bid to be alive and well as the week progresses," said Jeffrey Halley, a senior market analyst at OANDA.

Spot gold rose 0.4 percent to $1,283.94 per ounce at 0405 GMT. It hit a peak of $1,284.96 an ounce early in the session, its highest level since April 21. U.S. gold futures were up 0.4 percent to $1,287.1 an ounce.

In Britain, Prime Minister Theresa May's lead over the opposition Labour Party has narrowed to just 1 percentage point, according to a poll by Survation for ITV television on Monday. The vote is now expected to be much tighter than previously predicted.

"A decent win for the incumbent should ease any geopolitical fears. A hung parliament or a move towards the Labour Party could lead to some uncertainty fuelling gold prices," said National Australia Bank analyst John Sharma.

Meanwhile, ECB policymakers are set to take a more benign view of the economy when they meet on Thursday and will even discuss dropping some of their pledges to ramp up stimulus if needed, four sources with direct knowledge of the discussions told Reuters last week.

In the wider markets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent, while the
dollar index touched a seven-month low against a basket of major currencies.

So gold confidently keeps upside tendency. Unfortunately, we haven't got any retracement on Monday as new Middle East turmoil around Qatar has started. This reason has pushed gold (and Yen) to new highs.
Our target for 1-2 sessions stands at 1300 area, as this is minimal target for monthly grabber pattern. Here we also have MPR1 and dialy overbought, but technical tools shows that real next destiantion should be around 1330 area:

Hardly gold will turn to deep retracement right now, that's why we probably should watch for nearest levels, either 1277 or 1272 K-support:

 

[Sive Morten]

Good morning,

(Reuters) - Gold edged lower on Wednesday, although still holding near its highest in seven months,
supported by a weaker dollar ahead of key political and economic events that are expected to stoke bullion's safe-haven appeal.

A national election in the UK, a European Central Bank policy meeting and former U.S. Federal Bureau of Investigation (FBI) director James Comey's Senate testimony are all occurring on Thursday.

The events have the potential to boost the appeal of bullion, which is often used as an investment option during times of political and financial uncertainty. A combination of geopolitical concerns, including the UK
elections and a wilting U.S. dollar as Wall Street loses faith on U.S. President Donald Trump delivering on his campaign promises, have kept gold's bullish streak going, said Jeffrey Halley, a senior market analyst at OANDA.

"With the degree of uncertainty around as we head into the latter half of the week, there would appear to be no reason for gold's march higher to peter out," Halley said.

Spot gold fell 0.1 percent to $1,291.66 per ounce at 0350 GMT. On Tuesday, it rose 1.1 percent and hit its highest level since November last year at $1,295.97 an ounce. U.S. gold futures for August delivery dipped 0.3 percent to $1,294.2 an ounce.

"At $1,290, gold prices look too rich for our comfort. It has been rallying simply because of safe-haven demand," OCBC analyst Barnabas Gan said. "Once this driver that underpins the strong gold price
disappears, beyond Thursday and till the end of June, expect gold to lose its lustre," he said.

A U.S. interest rate hike in mid-June should yield a more expensive greenback and pull gold prices lower, Gan said.

British Prime Minister Theresa May looks set to increase her parliamentary majority in Thursday's election, an opinion poll showed on Tuesday, although another survey suggested the race with the opposition Labour Party was neck and neck.

Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, on Tuesday rose 0.49 percent to 855.16 tonnes.

The dollar index held steady against a basket of major currencies but stayed close to the near-seven month low hit on Tuesday.

So, formally, market has completed monthly grabber target as recent top was washed out for few cents. But technically we have two more targets. First one is based on daily AB=CD patttern around 1313 and next one is monthly 1330:

Today, at the eve of Super Thu, market could take minor relief. Thus, if any retracement will happen, it will hold above 1281 Fib support:

 

[Sive Morten]

Good morning,

(Reuters) - Gold edged lower on Thursday as investors awaited cues on market direction amid a number of
geopolitical events later in the day that could boost the safe-haven demand for the metal.

Polls open in the UK national elections later on Thursday while the European Central Bank (ECB) may discuss dropping additional stimulus pledges at a meeting later and former United States Federal Bureau of Investigation director James Comey will testify before the U.S. Congress about his interactions with
President Donald Trump later in the day.

"A lot of things are happening at the same time... There may be some kind of impact that may push up the volatility rather than the direction of price moves," said Mark To, head of research at Hong Kong's Wing Fung Financial Group. "Gold is likely to fluctuate somewhere between the $1,280-$1,300 range," he said

Spot gold was down 0.2 percent, to $1,284.24 per ounce at 0439 GMT. U.S. gold futures for August delivery dipped 0.5 percent to $1,286.80 an ounce.

The yellow metal fell from a near seven-month high on Wednesday after Comey's written testimony to the U.S. Senate contained few surprises. Comey's testimony did say President Trump asked him to drop an investigation of former national security adviser Michael Flynn as part of a probe into Russia's alleged meddling in the 2016 presidential election.

However, uncertainty surrounding the UK poll, which Prime Minister Theresa May called for to strengthen her hand in looming Brexit talks, kept bullion's losses in check. A final flurry of opinion polls gave May's Conservative Party a lead between 5 and 12 percentage points over the main opposition Labour Party, suggesting she would increase her majority - but not win the landslide foreseen when she called the election seven weeks ago.

"At these levels, gold may already have a lot of today's event risk built into its price," said Jeffrey Halley, senior
market analyst at OANDA. "That said, with the (UK poll) results coming out during the Asian session tomorrow morning, the downside for gold is likely to be limited as we run into the weekend," he said.

Meanwhile, the ECB is likely to keep its easy monetary policy during its meeting as inflation remains below its target despite stronger economic growth in the euro zone. However, some policymakers may take a better view of the economy and drop some pledged to ramp up stimulus.

Gold market stands in tension on a background of expectation of election results in UK. THis is major driving factor today. Currently, we can't call you to make any trades, just because we do not have reliable technical background and because session will be very nervous and volatile. But definitely it is not time to go short.

Retracement to 1281 that we've discussed yesterday has happened. We even have got here some kind of B&B "Buy" trade...

Of course it is impossible to predict election results, but technically, market gives a hint on possible unexpected result as it forms hidden bullish divergence on hourly chart. Such divergences suggest action above previous top. But today this could happen mostly if Labour party will break Conservative domination.

Anyway, if you intend to trade it, you need drop your trading volume for 2-3 times to place very far stop as volatility or slippage could wash you out. Think twice before join this party...

 

[Sive Morten]

Good morning,

(Reuters) - Gold edged down on Friday ahead of the UK election verdict with early results suggesting no clear winner which could push the country into a new bout of political turmoil before Brexit talks. The prospect of a hung parliament casts doubt over the premiership of Theresa May, who had gambled with the snap polls
for a stronger mandate before launching into arduous divorce talks with the European Union.

An exit poll predicted the Conservatives would win 314 seats in Britain's 650-member parliament and the left-wing opposition Labour Party 266 -- a "hung parliament" with no clear winner.

"Gold has been whipsawed in the last 24 hours, and is trading marginally lower at present," said Jordan Eliseo, chief economist at ABC Bullion. "The big move of the day is in sterling, which has been savaged, with the Tory Party looking like they'll fall well short of the majority they were expecting. There were no major
surprises out of the ECB meeting, with gold market participants now looking forward to next week's FOMC meeting."

Spot gold was down 0.3 percent at $1,275.08 per ounce at 0221 GMT. U.S. gold futures for August delivery were 0.2 percent lower at $1,277.30.

The pressure on gold is from the events in the United States, including former FBI director James Comey's
Congressional testimony and improving economic data, which are prompting people to speculate on the Federal Reserve's next moves, said Brian Lan, managing director at gold dealer GoldSilver Central in Singapore.

Comey accused President Donald Trump of firing him to try to undermine the agency's investigation of possible collusion by his campaign team with Russia's alleged efforts to influence the 2016 presidential election. However, his statement was seen containing no major surprises.

Meanwhile, the number of Americans filing for unemployment benefits fell last week, unwinding half of the prior period's jump and suggesting the labor market was tightening despite a recent slowdown in job growth.

In other markets, sterling fell sharply amid ambiguity over the British election results, sideswiping investors who had already weathered major risk events in the United States and Europe.

The dollar index, which measures the greenback against a basket of major currencies, was up 0.4 percent at 97.302.

So, as major driving factor for gold in recent days was Comey speech and as it has appeared poor - gold has dropped. Besides, right now investors start to watch on coming Fed meeting. Rate hike itself mostly has been priced in, but what Fed will say, how hawkish comments will be - this is another driving factor for gold and right now it is more bearish rather than bullish (although we think that we will not get more rate hike in 2017)...

Technically as gold wasn't able to show upside continuation to 1300-1330 area in a "free space", where it has no OB, no Fib resistances or Pivots, but dropped - it means deeper retracement is coming. In short-term perspective most probable destination is 1264 Fib support:

Right now gold is passing through 4-hour K-support. Also this chart shows that around 1264 we will get K-support as well, since 4-hour 5/8 Fib level coincides with daily 3/8 one:

On hourly chart we could get butterfly Buy with 1.618 extension right around 1264 strong support. Right now it is difficult to predict, whether major retracement will stop there, but, at least this setup could be used for short-term trading: