Gold prices ended Wednesday’s session up $3.80 an ounce, extending their gains to a third-straight session, after Federal Reserve Chair Janet Yellen signaled a cautious approach to further monetary tightening. Yellen said the Federal Reserve will need to keep gradually raising interest rates in the coming years, but not to levels seen in previous rate cycles. XAU/USD traded as high as $1225.64 but gave up some of earlier gains as a rally in equities weighed on the market. XAU/USD is still trading below the daily and the 4-hourly Ichimoku clouds, suggesting that the downside risks remain. However, as I pointed out yesterday, prices are above...
Ahead of next Monday’s meeting, EU chief negotiator Michel Barnier was in no mood to offer his UK counterpart David Davis an olive branch as he once again highlighted the obligations that the UK must adhere to before trade talks could commence. Barnier said that there still remained ‘numerous differences’ on the rights of EU expats in the UK and that it would be a problem if the European Court of Justice was not allowed to be the ultimate guarantor of rights, something that the UK strongly opposes. And turning his attention to the UK’s exit bill from the EU, put by the latter at around EUR100 billion, Barnier said, “It’s not an e...
What did we learn from Fed Chair Janet Yellen? Her prepared statement contained some worries about inflation, but she later balanced things out. Here is the view from SEB: Here is their view, courtesy of eFXnews: SEB Research comments on Fed Yellen’s testimony before the Congress. “Today’s testimony reinforces our view that the Fed is currently in a wait-and-see mode. It is a close call but we stick to our September hike forecast for the time being. However, if the weakness in inflation continues we will probably push back our expectations for a hike in December unless the Fed indicates that they put more focus on the tightening labo...
In the last update we had thought that gold might escape its usual seasonal malaise this year, but it didn’t and went into a rather sharp downtrend and dropped again quite sharply on Friday. The good news though is that this drop has not impacted the big picture at all, which remains strongly bullish, and a bonus is that this drop has flushed out a lot of remaining weak hands, as we will see when we come to the latest COT charts and set the sector for a reversal soon leading to a strong uptrend. On the latest 6-month gold chart we can see the downtrend in force from early June which on Friday took the price beneath the May low. Moving avera...
There are several banks reporting earnings on Friday before the market opens. The financials have seen a solid run over the last few weeks after their balance sheets all passed the stress tests. A great number of banks also increased dividends and raised their buybacks at that time, so does that mean we are going to get good earnings from group? There are four big banks, and two smaller ones reporting so we should get a good idea of what to expect from the others in the group by the time the market opens. Let’s take a look at the four bigger banks that are reporting Friday morning. Citigroup Citigroup (C – Free Report) is expected to ...
Rio Tinto (NYSE: RIO) is one of the world’s leading miners. It has been in business for 140 years and employs 50,000 workers in 35 countries. The company mines for aluminum, copper, diamonds, uranium and various other natural resources. But our SafetyNet Pro’s analysis of the company tells a different story… Last year, holders of its American depositary receipts (ADRs) received $1.70 in dividends, which equals a 3.9% yield on today’s price. The company has not declared a dividend yet for this year. ADRs are traded on U.S. exchanges and represent shares of companies traded on foreign exchanges. The company’s cash flow is forecast to ...
Add MKM Partners Chief Economist & Market Strategist Michael Darda to the increasingly long list of analysts who are looking for the US Federal Reserve to start a balance sheet diet in September. Oh, and about those recent moves higher in the US Ten Year Note, don’t worry, dear investor. There is a relative value analysis at play as rising interest rates could continue. Rising interest rates impact stock market valuations, but this time it could be different The traditional analysis regarding the relationship between stock valuations and interest rates is accurate. “Yes, it is true that all else equal, rising discount rates will press...
As technology advances, we are becoming more and more interested in the idea of home automation. We feel that it would be great to have the lights turn on at a certain time or even have the blinds automatically go up in the morning. This is called the internet of things and we are only on the tip of the iceberg. Every year it seems as though there is some new way to automate our lives. While I am not going to get into the advantages and disadvantages of automation in this post, I am going to talk about 2 big players in this space. Both Cisco (CSCO) and Sierra Wireless (SWIR) are in a position to benefit greatly from the internet of things. Bu...
Ever since the financial crisis, it’s not uncommon to read articles and studies about trust in banking and whether trust is “up” or “down.” In the past year alone: Ernst & Young reports consumer trust in banks is diminishing. September 2016 International Banker claims that trust is often found wanting in today’s banking relationships. December 2016 Edelman reports in their 2017 Trust Barometer that in the United States 60 percent of financial institutions bounded forward (in trust) six percentage points from 2016. March 2017 And according to The Hill, almost a decade later, public trust in financial institutions remains stub...