XULF Report – 3/7

Expecting a continuation?

XULF Report

Gold’s bounce has either ran out of steam or is pausing for breath reaching a high of $1267 yesterday and has since retreated due to some profit taking. Gold bulls will be trimming down positions ahead of the ADP Non-Farms today and the all-encompassing Non-Farms on Friday as the market majority are expecting a continuation of the positive data last week. Since gold’s drop to $1179 last week we have seen a shift in market dynamics as miners cut back on production and an increase in demand in the physical market has sparked a substantial bear market rally. Barricks, the largest gold miner, has now announced it is delaying the opening of its Pascua-Lama mine till 2016 one of the reasons being the drop in gold prices therefore supply squeezes like this should offer gold a bottom support.

Yesterday price did manage to penetrate the $1261 level but the breakout only produced a mere $6 profit and the bears claimed control at $1267 before price found resistance at the Ichimoku clouds. Right now it is difficult to predict the next move on a short term basis because it is dependent on whether we are in a pullback of a rally that began last Friday or that the next leg of the long term bearish trend is assuming itself. Therefore exercise patience and wait for a pattern or strong trendline to emerge before taking a risk. In summary this 4 hour chart is manifesting some profit taking, indecision and cautiousness ahead of the Non-Farm numbers. Often during such market conditions triangle patterns can appear so keep a close eye on any developments.

Some factors for traders to be aware of at present are; the USD/JPY has crossed up above the 100 level again which isn’t good news for gold but if the bulls really do believe this market is oversold then they can overcome dollar strength because, although it may come as a surprise, the dollar accounts for approximately 15% of gold fluctuations meaning both markets can actually move in the same direction. China are currently fighting off the dark cloud of a credit crunch which could have opposing effects on gold subject to the amount of uncertainty it generates. Spain and Italy submit their services industry PMI at 08:15 and 08:45 GMT today which could give investors evidence to add to Monday’s data that there is a bottom in sight for the Eurozone’s economy. At 13:15 the US reveal the private Non-Farms which, as always, will act as a precursor to the US Labour Departments payroll number on Friday.


Market Analysis Monday 3rd of July

 Gold slips as a stronger dollar

ANALYSIS 03-07-2013

Post-Holiday, Hong Kong Exchanges Closed Down

Hong Kong shares to trading on Tuesday recorded a decline. Post-holiday trading yesterday, the Hong Kong stock market has become weaker due to a negative sentiment about the decline in China’s manufacturing sector data for the month of May.

Technically, the index in the trading session today, Wednesday (03/07) 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 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 20745 and 20793. If it fails at 20 660, then the index is expected to tend to test the next support level ie 20 599 back and continued up to the possibility of being in the area of ​​20 543.

Dollar Translucent Again Above Resistance Level

The dollar rose against various major currencies marked USDJPY pairing breakout above 100.00 level for the first time in the last month while the EURUSD testing 1.3000 psychological level in 5 consecutive days.

Technically, the trading session today, Wednesday (03/07), the pair euro dollar likely to move in a negative trend.

The weakening Euro is mainly expected to immediately reexamine the minimum support at 1.2852 and 1.2764 maximum. Meanwhile, if the euro is able to break and hold above 1.2970, then another alternative scenario the chance to test Euro Resistance at 1.3059 and 1.3147 area.

Gold Slips As A stronger dollar

Gold edged lower on Tuesday as the dollar strengthened and investors looking for further indications that the Federal Reserve may soon put an end to the U.S. stimulus program.

Technically, gold at today’s trading session on Wednesday (03/07) 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 ​​1211.34 and re-test the maximum level of 1183.54. However, if the price of gold is able to break and hold above 1244.30 then estimated the price of gold could potentially test the Resistance 1273.01 and 1299.98.

Gold’s bounce continued – 2/7 – XULF Report

Gold’s bounce continued

XULF Report

Gold’s bounce continued yesterday supported by manufacturing data from Europe, Great Britain and the US helping it reach $1262 which was the long target level yesterday in my Weekly Gold Report. Italy and Spain showed refreshing improvements in their manufacturing sector signalling Europe could be slowly turning a corner and this benefitted commodity price across the board.

In Monday’s Weekly Gold Report I focused on the 4 hour chart to discover where this bounce would find resistance. Price crossing up through the Ichimoku Kijun Sen line was a bullish signal but as expected the 38.2% Fib Retracement level at $1261 has provided resistance. As I write price is testing for a second time so short term the market is kind of at a crossroads deciding on whether to break or bounce again. Any bearish candlesticks around resistance $1261/62 is a good time to sell with low risk and on the contrary long bodied bullish candlesticks which have penetrated this level will be a good time to buy. On a break price could have a rally but be aware it will likely find some resistance as price intersects with the Ichimoku clouds.

Economic data today is rather light but it’s worth being mindful of the Spanish Unemployment Change 08:00 GMT, UK Construction PMI at 09:30 GMT and US Factory Orders at 15:00 GMT especially now after yesterday’s positive data as the market will be examining data even closer.

Market Analysis Monday 2nd of July

Encouraging on physical demand

The Nikkei Continue Positive Trend 3 Days

Japanese shares for trading on Monday closed up. Encouragement of the impact of the depreciation of the yen against the U.S. dollar which is currently predicted at the level of 99.59 per U.S. dollar back into equities a key factor in addition to a report Monday on upbeat data Tankan manufacturing index for the month of May by 4 points, or higher compared with a previous prediction by 3 points.

Technically, the index in the trading session today, Tuesday (02/07) 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 13 842 and 13 763. If it fails in 13970, we then estimated the index tends to retest the resistance level of 14024 and continued up to the possibility of being in the 14098 area.

The yen fell against the dollar

The yen fell against the dollar hit the lowest level that has never happened since the last three weeks, as the central bank’s Tankan data is released showing the level of large-scale manufacturing sector is optimistic in the second quarter and reached the highest level in the last 2 years.

Technically, today’s trading session on Tuesday (02/07), the dollar yen pair has a chance to move in a positive trend.

A stronger yen primarily expected soon reexamine the minimal resistance at 101.15 and 102.17 maximum. Meanwhile, if the Yen was able to break and stays below 99.54 then another alternative scenario that is likely to test support Yen’s in the area of ​​98.21 and 97.13.

Gold Turning Direction After Falling to Lowest Since 2010

Gold rose for a second day in New York on speculation falling to 34-month low and the biggest quarterly fall on record will encourage physical demand.

Technically, gold in the trading session today, Tuesday (02/07) 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 ​​1263.29 and re-test the maximum level of 1267.93. However, if the gold price could not break and stays below 1257.05 then estimated the price of gold has the potential to test Support the 1251.97 and 1247.18.

Exciting week for gold – 1/7 – 5/7 – XULF Weekly Report

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.