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GOLD PRO WEEKLY, November 13-17, 2017

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Nov 12, 2017.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    (Reuters) - Gold prices turned lower on Friday as U.S. Treasury bond yields rose, but losses were
    limited by weaker stock markets and the dollar, which fell due to uncertainty over U.S. tax reform.

    A rise in U.S. bond yields pressures gold by reducing the attractiveness of non-yielding bullion, while a weaker dollar makes bullion cheaper for holders of other currencies.

    "A higher yield tends to increase the cost to carry gold, and we had a little uptick in the yield curve slope," said Bart Melek, head of commodity strategy at TD Securities in Toronto. Two-year yields were at a nine-year high as traders closed out curve-flattener positions and dealers reduced their holdings of longer-date debt following this weeks auctions.

    Spot gold was down 0.7 percent at $1,275.60 an ounce by 1:55 p.m. EST (1855 GMT). It touched $1,288.34 on Thursday, its highest since Oct. 20 and was on track for a 0.5 percent weekly rise. U.S. gold futures for December delivery settled down $13.30, or 1 percent, at $1,274.20 per ounce, a 0.4 percent weekly rise.

    The dollar was set for its first weekly fall in a month as disappointment that a landmark U.S. tax overhaul may be delayed until 2019 put a brake on the currency's recent rally. Uncertainty over the tax plans also hit U.S. stock markets and helped end the longest run of global share price gains since 2003. Expectations of lower taxes, one of President Donald Trump's key promises, have helped power the S&P more than 20 percent since the 2016 presidential election.

    Political or economic uncertainty often prompts investors to buy gold to protect their assets from declining yields, since gold is a non-yielding commodity. Further share price falls would likely increase the price of gold, said Saxo Bank analyst Ole Hansen.

    Bitcoin bubble, toil and trouble
    by Fathom Consulting

    Despite being intrinsically worthless, the price of one Bitcoin has now surged through $7100, meaning it is now worth almost six times as much as an ounce of gold. As the most well-known and widely-traded virtual currency, Bitcoin allows users to bypass banks and other payment processes to pay for goods and services directly, without the need for an intermediary. Proponents say this gives it value, along with the blockchain technology it’s built on. But the question remains, is it in a bubble? Using the tipping point for Bitcoin of 2013 where its usage had begun to level off, we calculated that its current price is almost six standard deviations above its long term average.

    COT Report

    In last 3-4 weeks we see mixed dynamic of CFTC data. While gold stands around extreme levels of long position, now some bearish sighs are started to appear. For example, on the chart we can see weeks when open interest has risen while net long position has dropped. It means that "careful" shorts start to appear, although this reversal doesn't get strength yet.
    Mostly current sentiment could be described as "indecision". While some reducing of net long position has started but it stands quite unstable yet. People do not buy gold but at the same time are not hurry to sell it.


    Approximately the same picture we see on SPDR fund statistics. Although gold shows significant volatility in recent 3-4 weeks, but SPDR storages shows slow but stable decreasing:

    Recent events, guys, make us take critical look at action on gold market. Key markets show hints on dollar strength that could last for 6-8 months. As we coming closer to 2018 and December Fed meeting, as stronger pressure of anticipating of dollar strength becomes.
    Thus, last time we've shown long-term charts on 10-year Notes, Dollar Index. They are suggest strong growth of US Interest rates that will be supportive for dollar, but deadly for gold market.

    And now perspectives of upside action do not look as promising as it was 2-3 months ago.

    Currently gold has formed "222" Sell pattern on monthly chart. When price has started up from 1050 lows - long-term bear trend line has been broken and re-tested later. But after that upside action has slowed significantly. Besides, this upside action has taken the shape of AB-CD pattern, that is typical for retracement.

    This makes us doubt on upside continuation here and we suspect that this AB-CD action of "222" pattern mostly should be treated as retracement after drop out from 1380 area rather than new upside leg.

    September month has shown reversal shape and if it would have closed slightly lower, we could call it as "reversal candle".

    October doesn't bring a lot of new inputs as trading range is rather small and mostly as September as October still stand in August range. November stands even smaller inside October range. this nested action indicates market's contraction and sooner or later will lead to fast breakout in one or other direction.

    Besides, market stands at strong 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.

    Year is coming to an end and the fact that upside action was stopped by YPR1 tells that 2017 upside price action mostly a retracement of long-term bear trend.

    Yes, we have bullish scenario as well. Next major target will stand around 50% Fib level and Agreement, as it coincides with upside AB=CD objective point as well. Market could take the shape of butterfly to get there, if our "222" pattern will fail. 1.27 extension also stands in the same area. But to keep this scenario valid price should not drop too deep. If gold will break 1205 lows, it will suggest deeper downside continuation and put butterfly and any upside continuation under question.

    Finally, gold is turning to seasonal bearish trend that starts in February, but most active stage of bullish trend ends in August - October. As you we can see market was not able to get some advantage from it.


    Weekly analysis also mostly stands the same as price is coiling around major 1260 K-support area.

    This chart shows that gold has dropped back to major K-support area. And this recent drop is important, if we will take a look first at the strength of preceding upside action. Rally from 1205 to 1350 was rather strong, a lot of tail closing candles. In our "morning star" pattern 3rd candle was also rather strong.

    Gold has uncompleted AB-CD pattern inside "222" and all these reasons were not enough to start upside action. Market has dropped back to K-support area and mostly erased "morning star". This price action mostly shows weakness rather than normal bullish market behavior. This is most important detail here, on weekly chart.

    Besides, gold has completed harmonic swing of retracement once "morning star" has been formed, but it was not able to re-establish upside action yet. Trend by MACD still stands bearish here:


    Now we're coming to most interesting thing here. Within last 2 weeks there were nothing to do on daily chart as price has turned to triangle consolidation, and our analysis mostly was focused on intraday patterns.

    We just said that here, on daily, we need to watch for signs of weakness. And one of them that we've mentioned could be inability of gold prices to reach upper border of triangle. Now it seems that we could get it. At least, Friday action pushed price below MPP again and overlaps action of half of the week.

    Overall upside action is rather choppy and it is difficult to treat it as new upside trend. If things indeed stand so, then we could get downside breakout and butterfly pattern with first target around MPS1 and 1250 area:


    So, our setup on intraday action mostly was correct and we've got our "222" Sell pattern on 4-hour chart. Drop down has started accurately by 3-Drive "Sell" pattern on hourly chart. Of course, as gold is driven by political factors mostly - everything could happen. But, based on technical picture that we have here, I would suggest further downside action. AB=CD part of "222" pattern is rather harmonic and make pattern more reliable, downside action was rather strong on Friday.

    So, on hourly chart we probably could watch for some bounce. Retracement should not be too strong as downside action just has started. Market has reached 5/8 Fib support area and this could become a reason for minor bounce:


    On longer term perspective now more factors have appeared that indicate more pressure on gold due coming USD strength.

    As on Friday gold has shown fastest action within last 2 week, probably it could become a starting point of daily triangle breakout.

    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.
  2. scharf

    scharf Recruit

    Jul 24, 2017
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    Yes sir on the Bitcoin bubble! That stuff looks suspicious as hell. Sounds a little like the .com bubble when traders were basing their picks on website hits!
    Thanks again Sive, great analysis. That drop on Friday was something like a $4 billion unloading of contracts at the same time... seems a little strange to me
    Sive Morten likes this.
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Cool. And could you give some link may be on this event or news... It is rather interesting, and could be important because neither CFTC nor SPDR fund shows this.
    I suspect that may be turmoil comes from Saudi as it was starting been robed.
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
    Likes Received:
    Good morning,

    (Reuters) - Gold prices were little changed early on Tuesday, with the dollar supported by higher U.S. Treasury yields and Asian stocks down amid uncertainty over tax reforms in the United States.

    * Spot gold was nearly unchanged at $1,277.39 per ounce at 0001 GMT. U.S. gold futures for December delivery slipped 0.1 percent to $1,277.60.

    * The dollar got support from higher U.S. Treasury yields in early Asian trading on Tuesday, with the dollar index , which tracks the U.S. currency against a basket of six major rivals, steady at 94.494.

    * U.S. Treasury two-year note yields hit a fresh nine-year high on Monday, as the yield curve resumed its flattening and investors priced in a 25-basis-point interest rate hike by the Federal Reserve in December.

    * U.S. inflation expectations edged up again in October, touching their highest level in six months, according to a Federal Reserve Bank of New York survey that could spell some relief for central bankers looking for hints of price pressure.

    * Asian stocks wobbled on Tuesday as investors awaited developments in U.S. tax reform efforts, while contemplating if a marked flattening in the U.S. yield curve might ultimately be a harbinger of an economic slowdown there.

    * Congressional Republicans pushed ahead on Monday on a U.S. tax code overhaul as a Senate panel considered the issue, but risks lay ahead with major intraparty disputes unsettled and President Donald Trump returning soon from Asia as the debate heats up.

    * Prime Minister Theresa May's blueprint for Britain's exit from the European Union faces a crucial test starting on Tuesday, when lawmakers try to win concessions from a weakened leader on the government's legislation to sever ties.

    * Hedge funds and money managers raised their net long positions in COMEX gold and silver contracts in the week to Nov. 7, U.S. Commodity Futures Trading Commission (CFTC) data showed on Monday.

    * Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.04 percent to 843.39 tonnes on Monday.

    So, on gold market we're watching on retracement, as we've discussed in weekly research. Now the major question is whether recent plunge will lead to situation change on daily chart and trigger downside breakout of triangle. Now situation looks promising and if this indeed will happen, we could get butterfly "Buy" here with 1250 area as first destination point.

    On 4-hour chart our "222" Sell has started well, but price holds above "C" point. That's why some theoretical chances still exist on higher action and greater "222" around 1298. At the same time thechincal picture tells that chances are not significant as "BC" leg is very deep to AB, AB is very harmonic to CD. Overall AB=CD action is rather choppy and collapse after CD leg was rather strong.
    Besides, this is not very interesting for us now, as we're mostly watching for retracement after Friday's collapse. If price will rise again above 1288 - we could will return to this question, but right now all eyes on upward retracement.

    Here we could watch for two leg AB=CD bounce by some reasons. Deep retracements are natural for gold market, previous action also was rather choppy with deep retracements. Besides, we expect some upside action EUR.

    Finally, this could give us "222" Sell pattern, with attractive entry price level and stop placement. That's why in current circumstances it looks as very good solution - to watch for AB=CD till 1281 Fib level
    Sugit likes this.
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
    Likes Received:
    Good morning,

    (Reuters) - Gold prices firmed on Wednesday as investors awaited the October consumer inflation data from the United States for potential hints on the Federal Reserve's monetary tightening policy.

    Spot gold was up 0.1 percent at $1,281.73 per ounce at 0351 GMT. On Tuesday, gold touched $1,270.56, its lowest since Nov. 6, before recovering to close about 0.2 percent higher. U.S. gold futures for December delivery slipped 0.1 percent to $1,281.80.

    "Gold is still stuck in a tight range as traders are waiting for additional signals before taking any view," ANZ analyst Daniel Hynes said. "This (U.S. consumer inflation data) is one of the most important datas, which could dictate sentiment leading into the next Fed meeting. Obviously, a rise in inflation is what the market is looking for... but for now it is taking a cautious approach," Hynes added.

    The Federal Reserve should keep its benchmark interest rate at current levels until there is an upswing in inflation, St. Louis Fed President James Bullard said on Tuesday. One of the newest Fed policymakers, Raphael Bostic, said he still backs a December interest-rate hike and that he would need to see further weakness in U.S. inflation and local signs of economic weakness to cause him to shelve expectations for
    gradual policy tightening.

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

    Spot gold looks neutral in a range of $1,270-$1,286 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

    "A number of other markets have been similarly range-bound," INTL FCStone Edward Meir said in a note.
    "We suspect traders have moved to the sidelines as they wait to see what happens to the tax bill where expectations for its passage have in turn led to significant strengthening in both the dollar and U.S. equity markets."

    U.S. Senate Republicans on Tuesday linked repealing a key component of Obamacare to their ambitious tax-cut plan, raising new political risks and uncertainties for the tax measure that financial markets have been monitoring closely for months.

    So, on gold market recently was a bit nervous session, but intraday volatility has made no significant impact on daily chart. Here we're still watching for triangle breakout and possible appearing of butterfly pattern.

    To be honest, guys, today I do not want to trade gold. Because recent action brings too much uncertainty and keeps door open for contradictive patterns. Thus, based on 4-hour chart we could get upside AB=CD, upside butterfly, downside butterfly, already have "222" Buy etc. Taking in consideration that today gold will be driven by CPI report and retail sales which we can't forecast, I would better sit a side for awhile.

    Still, it seems that light advantage stands on bulls' side. After strong plunge gold was able to stop right at 5/8 major Fib level, and shows solid upside bounce, accompanied by divergence as on 4-hour as on hourly charts:

    On hourly chart, as I've said above, we've got "222" Buy pattern and now price is forming bullish pennant:

    That's why I think that bulls have a bit more chances to succeed, but overall context that we have here is not sufficient for me personally.
    So, decide...
    fight2live, Synchronicity and Sugit like this.
  6. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
    Likes Received:
    Good morning,

    (Reuters) - Gold prices were little changed on Thursday after upbeat U.S. economic data bolstered the prospects of interest rate increases next month and beyond by the Federal Reserve.

    Spot gold was nearly unchanged at $1,278.55 per ounce at 0354 GMT. On Wednesday, gold touched a session high of $1,289.09, a peak since Oct. 20, before paring gains and ending the session about 0.2 percent lower due to a stronger dollar. U.S. gold futures for December delivery gained 0.1 percent $1,277.80.

    "It (gold's range bound movement) is a combination of Fed rate hike (expectations) and equity market volatility. There are increasing risks in the market now," said Argonaut Securities analyst Helen Lau.
    "Views around these two countering forces could keep gold flat in the short-term," she added.

    Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Underlying U.S. consumer prices increased in October, strengthening the view that a recent disinflationary trend worrying the Fed probably had ended.
    Falling unemployment and sustained growth mean the U.S. economy has accelerated beyond a sustainable level so the Fed should continue to raise interest rates, including next month, veteran Fed policymaker Eric Rosengren said on Wednesday.

    Spot gold remains neutral in a range of $1,270-$1,286 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

    "It is perhaps best to remain sidelined for now, as the gold complex seems to be trapped within a relatively tight trading range and has yet to assert a meaningful direction," INTL FCStone analyst Edward Meir said in a note. Asian shares got off to a cautious start on Thursday after Wall Street stumbled despite upbeat U.S. economic news and the Treasury yield curve hit its flattest in a decade.

    Today guys, we will take a look at JPY instead of gold. Here interesting setup is forming and, may be it will be useful for somebody.

    On 4-hour chart we have clear H&S pattern that hasn't met the target yet. Now market stands in minor upside bounce here. We're mostly interested in downside continuation and completion of AB=CD target @ 112.25. That's why keep an eye on possible bearish grabber that could be formed here:

    The major reason, why I decide to show this setup is where market stands right now. On hourly chart we could get butterfly "Sell", which is quite logical here, as it could lead yen directly to AB=CD target. And price now stands at the top of right wing. Of course we have risk to get upside AB=CD (and larger "222" Sell" btw), as on EUR it is also suggested deeper retracement. But, here is place where we could take bet on this butterfly appearing with minimal potential loss.
    But this is not all, of course. On hourly chart we also have a kind of bearish dynamic pressure as trend has turned bullish, but price mostly stands in sideways action:

    Besides, on 15-min chart we could get "222" Sell and mostly have got it already. CD leg of upside action is significanlty slower than AB. This could mean that market will reverse down around 113.10-113.16 area as soon as upsde 0.618 target will be completed.

    Invalidation point as "222" Sell" as butterfly are the same 113.20 top, it is very close to entry price. Yes, this setup carries solid risk to be vanished, but... at the same time it is very fascinating.
  7. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
    Likes Received:
    Good morning,
    Today we also will take a look at FX market instead of gold and GBP in particular.

    Just brief news on gold...
    (Reuters) - Gold prices rose on Friday as the dollar weakened after a report that investigators looking into possible Russian interference in the 2016 U.S. presidential election had subpoenaed President Donald Trump's election campaign for documents.

    Special Counsel Robert Mueller's team issued the subpoena last month for documents containing specified Russian keywords from more than a dozen officials, the Wall Street Journal reported.

    Spot gold had climbed by 0.3 percent to $1,282.72 per ounce by 0429 GMT. It is up about 0.5 percent for the week, in what could be its second straight weekly gain. U.S. gold futures for December delivery rose 0.4
    percent to $1,282.70.

    "The fall in the dollar and strengthening in Asian currencies have made gold attractive for Asian investors," said John Sharma, an economist with National Australia Bank. However, uncertainties surrounding a U.S. tax reform bill and a likely interest rate hike by the Federal Reserve next month are sending mixed signals to the market, keeping gold rangebound, he said. "Prices should likely continue to hover between $1,260 and $1,290 in the short-term," he added.

    Republican U.S. lawmakers on Thursday took an important step toward the biggest tax code overhaul since the 1980s as the House of Representatives approved a broad package of tax cuts sought by Trump.

    "Gold prices will continue a sideways drift in the coming months as rising nominal interest rates in the U.S. keep a lid on investment demand," BMI Research said in a note. "Prices will grind moderately higher in the longer term as developed market inflation rebounds."

    San Francisco Fed President John Williams reiterated his view on Thursday that the U.S. economy is growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5 percent.

    Meanwhile, Cleveland Fed President Loretta Mester said on Thursday she feels inflation is poised to pick up, clearing the way for the Fed to continue its gradual process of raising interest rates.

    Spot gold is biased to rise above a neutral range of $1,270-$1,286 per ounce, and gain further towards $1,298, according to Reuters technicals analyst Wang Tao.

    Today, guys, I thought that situation on Cable might be interesting to you, especially because it is forming clear pattern.
    On daily chart is nothing interesting yet - price stands inside triangle formation:

    But inside triangle we have clear "222" Sell pattern that is almost reached starting point:

    Based on calculations downside action could start somewhere around 1.3250-1.3260 area. On hourly chart we have two other patterns that point on this level. This is minor AB-CD inside larger "CD" leg and butterfly on top:

    As on EUR we also expect downside reversal, so, may it it will work as well...

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