Sunday, June 30, 2013
XULF Weekly Report 1/7 – 5/7
Exciting week for gold
Weekly XULF Report
A series of good economic data from the US caused gold to drop even more last week opening at $1299.64 and closing down $67 at $1232.97. It was always going to be an interesting week with market participants eagerly awaiting data that could materialise Ben Bernanke’s intentions stated at the FOMC press conference the previous week. The Fed Chairman has expressed the plan to begin tapering down the bond buying within a few months if data continues to paint a picture of a strengthening economy and last week delivered a set of strong data spanning across housing, consumer confidence, spending, jobs and durable goods bringing that plan closer to action. Stocks and Treasuries have declined since the FOMC conference on 19th June but gold has been hurt the most as the yellow metal’s fragile position is being compounded by low inflation and may have further to drop according to its correlation to the CPI figure. The gold to CPI ratio historical average is 3.4 to 1 however the current ratio is 5.3 to 1 meaning it is still overvalued and that there could be further declines to come.
Traders looking to dip their toe for a bounce will be motivated by gold having a fight back Friday and completing a bullish engulfing candlestick. There are reports that gold miners are cutting back on production with the price at these lower levels which should help gold to some extent in the short term. This morning the Stochastic and the RSI have generated buy signals with is more evidence we could see a bounce.
The 4 hour chart is an interesting timeframe to analyse given gold’s technical situation and apologies for the chart looking confusing but I’m using the Ichimoku indicator that consists of a few different parts. The Ichimoku indicator has recently signalled a buy by crossing the blue Kijun Sen line from beneath which acts in a similar way to a moving average. Since the crossover this morning there has been a spate of volatility but now price has penetrated we could see further inclines. A feasible long target is the 38.2% Fibonacci retracement at $1261 or until price interacts with the Ichimoku cloud. Before risking a buy it would be prudent to watch how the latest 4 hour candlestick prints for signs of whether price will continue the bounce or resume its bearish trend. The main events this week fall later in the week and are the Bank of Japan press conference where Governor Kuroda will be speaking and the ECB press conference on Thursday followed by the all-important US Non-Farms on Friday. Economic data is being even more scrutinized than usual now the Fed’s intentions are quite clear therefore we could have a volatile and exciting week for gold.
Market Analysis Monday 1st of July
Signs of rising demand
ANALYSIS 01-08-2013
Conditions Rally Still Happening in South Korean stocks
Positive trend occurred again in South Korea stock market. In trading Friday, the South Korean market was back in bullish trend due to the impact of a rise in U.S. stocks overnight is driven by the effect of lowering the jobless claims data for last week amounted to 7 thousand.
Technically, the index in the trading session today, Monday (01/07) is likely to strengthen, test positive trend. At the H4 chart informa bullish hammer gives an opportunity 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 H4 chart, is in the oversold area, cue upside.
Expected, the index tested the first resistance level of 260.67 and 273.73. If it fails at 232.03, then the next index is expected to tend to retest the 232.03 support level and continue up the possibility of being in the 221.07 area.
Pound Down Under Analyst Predictions
Sterling in trade week is generally observed plainly shows weakening trend against the U.S. dollar. Trading the currency pair GBP / USD is in the range of 1.5386 after opening at the beginning of the trading week was down about -177 pips or about -1.15% and closed at around 1.5209.
Technically, the trading session today, Monday (01/07), Strerling couple of dollars likely to move in a negative trend.
Weakening Strerling primarily expected soon retest the support at 1.5025 minimum and maximum 1.4919. Meanwhile, if Strerling able to break and hold above 1.5204, then another alternative scenario Strerling the chance to test the existing Resistance 1.5313 and 1.5425 area.
Gold Rebound from Low 34 Months
Spot gold prices rebounded from 34-month lows, the biggest jump in a month, as signs of rising demand for jewelry, coins and bullion after the precious metal is headed to its biggest quarterly fall in at least 93 years old.
Technically, gold at today’s trading session, Monday (01/07) 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 1267.33 and re-test the maximum level of 1295.91. However, if the gold price could not break and stays below 1229.35 then estimated the price of gold has the potential to test Support the 1196.35 and 1167.78.
Thursday, June 27, 2013
XULF Report – 28/06
Fall continues
XULF Report
The fall continues but there could be a bottom in sight now some gold miners are cutting back on production as it becomes less economically viable to continue output under $1200. Rising real interest rates attributed to speculators betting on the Federal Reserve raising rates during 2014 has contributed to gold being shunned to the sideline. Some Fed officials commented that the speculators actions doesn’t align with Ben Bernanke’s assessment of the economy last week and his language in regards to the Fed’s next move being data dependent and flexible. However this speculation has helped the bears force gold down.
This weekly chart shows gold’s bull run since October 2008 and since hitting a peak of $1921 in September 2011 gold has been on a general retracement. An important potential support level is $1159 which is the 61.8% fib retracement level which is incidentally a previous support. Price did drop as low as $1179 and is currently hovering around $1200 any traders looking to buy should consider placing stop losses under $1159 as long, medium and short term traders will all be keeping an eye on interaction with this level.
The 4 hour chart is hinting of a reversal now it’s printed a strong bullish hammer that looks to be perfect as the shadow is multiple times longer than the body and it is equal size to the bearish marubozu two candlesticks prior. More confirmation can be gleaned from the Stochastic which has generated a buy signal but bear in mind the RSI is still below 30. Therefore there is a probability a small bounce could occur however there is resistance forming at $1207 and bulls will be nervous by the fact price hasn’t yet bounced off the $1159 Fib level yet so trade cautiously and don’t be greedy if going long. A break up through this morning’s resistance at 1207 should trigger buying demand but bulls will find more resistance around $1213 where price could intersect with the current medium term bearish trend.
Market Analysis Friday 28th of June
1.5 Percent Loss?
Hang Seng Index ended strengthened Follow Asian Stock More
Hong Kong stock exchange yesterday ended the day Thursday. Strengthening sufficiently constant movement distinction exchange trading condition Thursday remembering yesterday covered by positive sentiment coming from a majority of strengthening Asian bourses and U.S. stock exchange yesterday. Investors also quite passionate in doing the action and purchase of shares, especially banking stocks and fares.
Technically, the index on the trading session today, Friday (28/06) have the opportunity to strengthen, test positive trend. On the H1 chart bullish hammer formation provides an opportunity for the index to move upside. However, the volume tends to increase, as well as an early indication bulish index. In addition, RSI, on the H1 chart, selling in saturated areas, signal upside.
Partly, the index test prior resistance level that is 21 481 and 22155. If failed in the 20549, the estimated index tend to test further back level Support ie 19 877 and the possibility of being extended to 19 202 in the area.
Consumer sentiment shore Euro Rebound
Yielding euro rebounded against the U.S. Dollar concomitant improvement in economic confidence the 17-nation bloc that transcends economists predicted. Executive and consumer sentiment index rose to 91.3 in June from 89.5 in May, according to the European Commission in Brussels, the better-than-estimated 90.4. Euro also benefited by U.S. data, which tends to erode the reduction speculation the Federal Reserve’s monetary stimulus in the near future.
Technically, today’s trading session on Friday (28/06), the pair euro dollar opportunity to move in a positive trend.
Strengthening of the Euro, especially predicted back soon test resistance at 1.3205 ie the minimum and maximum of 1.3328. And as, if the Euro is not able to break below 1.3036 and then endure another alternative scenario ie the Euro had the opportunity to test Support at 1.2896 and 1.2773 area.
Gold Closes Down By 1.5 Percent Loss
Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday (Friday morning hrs), extending the decline to 34-month low, as U.S. economic data exceed analyst estimates, scraping metal attractiveness as a store of value.
Technically, gold trading session today on Friday (28/03) potentially bearish, test returned negative trend, but prone to reversal. RSI indicators tend to re-test Support channel oversold area and heading, but Bollinger Bands are beginning to widen, thus providing the impetus for gold for upside.
Chance of gold price immediately prior to test Support at least in the area of re-test 1139.10 and 1106.72 maximum level. But if the price of gold is able to break above 1191.50 and defending the gold price estimated potential test resistance ie 1227.15 and 1261.93.
Wednesday, June 26, 2013
XULF Report – 27/06
Gold decline continued
XULF Report
The gold decline continued through yesterday but seems to have found a bottom at $1221 and is currently trading in the $1230’s. The shocking final measure of US GDP for the 1st quarter which was revised down to 1.8% from 2.4% which is bad news for the economy but good news for stocks as the Dow Jones had a triple digit rally. Gold hasn’t reacted as well but has managed to climb a few dollars however the outlook still looks bearish.
The 1 hour chart shows the latest candlestick has printed a engulfing bearish whilst simultaneously making a lower high whilst at the same turning around resistance. Three factors signalling bearish on one chart means we are likely to see gold move lower from here and maybe test support towards the lower $1220’s. Place stop above previous candlesticks high around $1245 and target support in the lower $1220’s which offer a good risk to reward ratio. If price begins to make new highs it is probable the reversal will take place.
The daily chart’s RSI is still converging with price action by showing lower lows which signals price isn’t ready to reverse just yet.
Economic influences traders need to be mindful of today are the Italian 10 year Bond Auction which unfortunately has no specific schedule but is likely to be around 10am GMT, the UK’s Current Account at 9:30 GMT and US Weekly Jobless Claims and Pending Home Sales 13:30 and 3pm GMT respectively.
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