Monday, June 3, 2013
Jalatama Loco London (XULF) Report 04/06/2013
XULF Report
After hovering in the $1390’s for most of yesterday gold had a surge reclaiming the $1400 mark last night spurred on by disappointing US ISM Manufacturing data that implied the Fed may postpone plans to reduce stimulus. The Fed wants to move on from the mixed bag of data at present before committing to winding down the programme which, in an odd way, means that poor economic numbers could lead to gains for equities and dollar-denominated commodities. USD/JPY dropped below the 100 yen level which also helped gold last night but given the overall fundamentals the pair are still well positioned to continue its bulls run driven by Japan’s aggressive QE plans and a buoyant stock market and the expectation that, even though there is mixed data from the US, a slowdown in stimulus is on the horizon and this will put pressure on gold in the long term.
Despite the volatility price is trading along a medium term bullish trend line on the 4 hour chart, although do bear in mind many bullish trendlines that have been drawn since $1338 level on 20th May across different timeframes have had to be redrawn because of erratic price movements therefore trade this trendline with caution. The angle on the trendline is mild enough to be sustainable however the heightened volatility signals the trend is weak. The latest 4 hour candlestick is printing as a harami offering an early sign for a short pivot trade but given the volatility consider shorter targets. The obvious target level is $1400 as there might be some buyers around this level and place a tight stop loss just above this morning’s of $1415. The medium term outlook is more bullish for gold as the 50 period MA is currently intersecting with the 100 period MA. If this crossover completes consider long trades as price bounces around the bullish trendline.
The economic highlights today are the Spanish Unemployment at 3pm and US Trade Balance at 8:30pm which is likely to impact the dollar and consequentially the gold market.
Market Analysis Tuesday 4th of June
ANALYSIS 04-06-2013
Kospi Index Weakens, Makin Steer 2000 Points Level
Negative movement returned at the South Korean stock market. After touching a 2000 basis points last week, the movement of stock is declining due to the negative sentiment of the bearish trend that occurred in the area of Asian bourses such as Hong Kong stocks and Japan.
Technically, the index in the trading session today, Tuesday (04/06) likely to weaken, test negative trends, the impact of Wall Street. On the bearish engulfing formation M15 chart gives an opportunity for the index to move downside. However, the volume is likely to increase, an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.
Expected, the index tested the first support level ie 259.63 and 258.33. If it fails at 261.95, then the next index is expected to tend to retest the 263.86 resistance level and continue up the possibility of being in the 265.33 area.
Aussie Rebound Sharply Ahead of Interest Rate Determination
Movement of the Australian dollar this morning (06/04) was recently up pretty strong, and the observed elevated currency against major currencies after the U.S. dollar opened at 0.9616 in early trading (00:00 GMT). Until this morning the Australian dollar climbed about 138 pips or + around + 1:43% and rolling was observed in the value 0.9754.
Technically, today’s trading session on Tuesday (04/06), the pair euro dollar likely to move in a positive trend.
A stronger Euro is mainly expected to soon re-test the resistance at 0.9871 minimum and maximum 0.9963. Meanwhile, if the Euro was unable to break and stays below 0.9748 then another alternative scenario the Euro likely to test support at the 0.9637 area and 0.9564.
Encouraging Hedge Funds Bullish Gold Bets
The Hedge Fund raising bets on gold rally most in two months as the U.S. economy expanded less than expected, prompting speculation that the Federal Reserve will keep stimulus speed.
Technically, gold in the trading session today, Tuesday (04/06) potential reversal, tested positive trend, but prone to profit taking. Indicator RSI resistance likely to re-test the bullish channel and into the area, but the Bollinger Bands are starting to shrink, thus giving impetus to gold to the downside.
Estimated gold price immediately prior to test resistance at least in the area of 1436.35 and re-test the maximum level of 1452.86. However, if the gold price could not break and stays below 1411.10 then estimated the price of gold has the potential to test Support the 1394.09 and 1379.52.
Jalatama Loco London (XULF) Weekly Report 03 – 07 June 2013
XULF Weekly Report 3rd June to 7th June
Last week was a strange week for gold. It finally broke through $1400 after numerous attempts over a 2 week period reaching a high of $1421.80 last Friday and then it seemed as though the bulls simply handed over all their hard work for the bears to take control again forcing it aggressively back below $1400. Gold’s rise until Friday was driven by some uncertainty creeping in regarding growth outside the US following the IMF and OECD reports and the market looking like it was ready to make a technical correction in its bear trend. However clearly the majority of shorting participants seem to be longer term and weren’t affected by the $1400 resistance break and hence added to their positions eradicating all the gains within a few hours. Interestingly USD/JPY, which has had stronger than normal inverse correlations to gold since the launch of Japan’s new QE programme, also dropped showing gold fell out of favour despite the dollar weakening which does not bode well for the metal. We could to see some dollar strength this week as USD/JPY finds support at the psychologically important level 100 yen and as the market anticipates ECB Mario Draghi to be unable to put any kind of positive spin on the Eurozone’s dire recession hit economy when he speaks after the rate announcement Thursday which will put pressure on the EUR/USD. Therefore considering probable dollar strength this week gold might be under more pressure. Gold’s destiny for the rest of the year is very much dependent on how equity markets react to the Federal Reserve’s management of tapering the unprecedented stimulus and how they manage market expectations. Gold has already factored in much of the Fed’s forthcoming tapering of stimulus but equities clearly haven’t which indicates equities could do worse than gold when the Fed finally begins to reduce the programme. It’s also worth noting that if we do see an equity correction gold may even benefit contrary to the consensus opinion as investors diversify and add commodities to their portfolios.
From a technical perspective gold is at a crossroads with conflicting data across different timeframes. The daily chart shows Friday’s candlestick was very bearish engulfing the prior day’s gains however the 10 day MA is currently intersecting with the 20 day MA which signals possible upward momentum. If we get a firm crossover from these 2 moving averages the bulls hope of a sustained correction may still be on the cards. Although the recent increase in volatility isn’t good for the bulls as volatility is usually associated with bear trends therefore any bulls should re-evaluate if we see further erratic price movements.
This week has a very busy economic calendar including US ISM Manufacturing tonight at 10pm, US Trade Balance 8:30pm Tuesday, Italian and Spanish Services PMI data Wednesday afternoon, the ECB’s rate announcement at press conference starting 7:45pm Thursday night and culminating in the US Non-Farm payrolls 8:30pm Friday night. Evidence that the US is creating more jobs and can feasibly lower unemployment towards pre-recession levels will cause whipsaw effects on gold as investors weigh up the impact on the equity markets therefore trade very carefully around this number.
Market Analysis Friday 03th of June
ANALYSIS 03-06-2013
Nikkei Closed Stronger, But Rally For 9 Months Ending
The Nikkei closed up 1.4% to 13,775, after falling 5.2% yesterday. But this month, the Nikkei declined for the first time since last 9 months, the Nikkei fell 0.6% this month. While the Topix adding 0.1%.
Technically, the index in the trading session today, Monday (03/06) is likely to strengthen, test positive trend. On the M15 chart bullish hammer berformasi provide opportunities for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.
Expected, the index tested the first resistance level of 14171 and 14611. If it fails in 13525, we then estimated the index tends to retest the support level of 13036 and continued up to the possibility of being in the 12610 area.
Euro Gains, ECB Expects Positive Signals
Euro in trading last week generally observed trend higher against the U.S. Dollar. Trade the currency pair EUR / USD is in the range of 1.2935 after opening at the beginning of the trading week has climbed about 62 pips or about + + 0:47% and closed at around 1.2997.
Technically, today’s trading session on Monday (03/06), the pair euro dollar likely to move in a positive trend.
A stronger Euro is mainly expected to soon re-test the resistance at 1.3138 minimum and maximum 1.3230. Meanwhile, if the Euro was unable to break and stays below 1.2992 then another alternative scenario the Euro likely to test support at the 1.2859 area and 1.2759.
Gold Drops the Most in 2 Weeks as Fed stimulus speculation
Gold futures fell the furthest in 2 weeks with the U.S. consumer confidence rose in May, the highest in nearly 6 years, sparking concern the Federal Reserve will keep monetary stimulus
Technically, gold at today’s trading session on Monday (03/06) potentially bearish, test returned negative trend, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band which began to widen, thus giving impetus to gold to the upside.
Estimated gold price immediately prior to test support at least in the area of 1365.27 and re-test the maximum level of 1347.06. However, if the price of gold is able to break and hold above 1393.20 then estimated the price of gold could potentially test the Resistance 1417.28 and 1437.43.
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