The domestic gold market in India is facing an upheaval as traders place an increasing number of bulk, short-term orders on fears Prime Minister Narendra Modi could seriously throttle overseas imports of gold. The traders’ fears stem from Modi’s plan to eliminate so-called black money from India’s monetary system by demonetizing the 500 and 1,000 rupee notes. The bills were previously the country’s largest currency denomination. Modi’s hard-line demonetization efforts are meant to root out untaxed funds held in secret by Indian citizens. It’s estimated up to a third of the country’s annual demand (1,000 tons of gold) is paid for...
It is no big secret the Federal Reserve is about to raise rates in December. Odds stand at 96% and the move in yields since Trump’s victory certainly signal the market is anticipating a rate hike. All the while the stock market has pushed higher. Russell 2000 has been up 9 out of the last 10 sessions as we continue to push into extreme overbought territory. Financials continue to be winners as they are large benefactors from higher interest rates. At some point, we would like to see a bit of consolidation, but we’ll be patient and take what this market gives us. It has been a great rally and if history is any indication we should see this...
Warning bells are going off on the semi conductor chart. Price is streched way too far above the 200 day moving average. This is when retail traders became the most complacent and when professional traders became the most nervous. ...
Gold prices accelerated downward once again after hawkish comments from Fed Chair Janet Yellen inspired another hawkish shift in the priced-in monetary policy outlook (as expected). The priced-in probability of a rate hike in December now stands at a potent 96 percent and the projected 2017 tightening path is at its steepest in eight months. Not surprisingly, this has undermined demand for anti-fiat and non-interest-bearing assets, punishing precious metals. Crude oil was unable to escape Yellen-inspired volatility. Prices were on the upswing after Saudi oil minister Khalid al-Falih said he was optimistic about finalizing a deal to cut...
S&P 500 The S&P 500 rallied during the day on Thursday as we continue to see buyers jump into this market. With this being the case, I think that every time we pullback you have to start thinking about going long as we are pressing up against a significant high as the 2200 level. If we can break above there, it becomes a longer-term “buy-and-hold” situation. I also recognize of the 2150 level below should be relatively supportive, and essentially the “floor” in this market at the moment. With this in mind, I am only looking to buy this market and I believe that the absolute “bottom” of the uptrend is somewhere near the 2...
On Wednesday, oil prices closed higher as inventory data came in much better than expected. The inventory data that came in better than expected was for the U.S. market. It is the sixth out of seventh week where inventory has dropped. Oil also edged higher thanks to the upcoming OPEC meeting next month, where a deal might be achieved in cutting crude output. The final item that pushed the price of oil higher wasdrop in production in China. The U.S. has seen less output over the last few months, and this has had a positive impact on the price. Based on the enormous drop of the stockpile, oil had surged to a 15-month high. WTI crude oil closed ...
GBP/USD did manage to recover on hopes of a softer Brexit. The team at Morgan Stanley sees further gains and a sell opportunity: Here is their view, courtesy of eFXnews: GBP has seen its strongest gain since ‘hard Brexit’ fears gripped markets a couple of weeks ago. GBP/USD has potential to 1.2650, but investors may soon have to deal with increasing uncertainties again. Parliament still does not have the right to vote on triggering article 50 which is likely to happen in spring starting a two year period of intense negotiations between the UK and the EU. Investment uncertainties will remain high, not boding well for the supply side of the...
S&P 500 The S&P 500 initially fell during the course of the session on Wednesday, but turned around to form a very strong ring candle. That being the case, the market looks as if it is trying to rally from here, as the 2150 level has offered quite a bit of resistance. The 2175 level above offers quite a bit of resistance pressure, so even if we break out a little bit to the upside we still have to deal with that. I think that the 2120 level below continues to be massively supportive, so if we can break down below there it’s likely that we will see support all the way to the 2000 handle. Although I believe that longer-term we go high...
Gold settled up $6.75 at $1269.12 on Wednesday as a weaker dollar provided some support for the precious metal. The XAU/USD pair extended its gains and reached the $1270/69 area as expected after the $1265/3 resistance was broken. The market had been going back and forth in a tight range recently, so breaking out of this consolidation is a positive development. The short-term outlook suggests that there is a possibility of prices marching towards the 1277 level as long as the market stays above the 1265/3 area. Breaching this barrier which happens to be the top of the 4-hourly cloud is essential for a bullish continuation towards 1285. Only a...
Energy 1. Let’s begin with the energy markets where crude oil prices hit the highest level in a year. 2. Part of the reason for the rally was another unexpected dip in US oil stockpiles. 3. Moreover, crude oil imports declined more than expected. 4. On the other hand, US total oil production (that includes Alaska) has been stable since June. As prices rise, it’s only a matter of time before US production ramps up again – capping further appreciation. The Permian Basin oil firms, for example, have been effective in maintaining and even growing production by drilling sideways (significant distances) and raising oil well e...