The Swiss Franc, Gold and US T-Bonds had benefited today with the poor jobs report. The US Unemployment numbers of this morning showed that no new jobs were added in August! The stock market took it on the nose and the Euro FX fell today on the news. The Euro Zone is also going through troubled times as the debt-ridden countries may not adhere to the austerity measures necessary to receive the bailout support necessary.
Global manufacturing is still flat and this is a concern for China as their exports are typically purchased by the US and the Euro Zone. China had been supportive of the Euro FX and the US Dollar, but as their economy may constrict, their capability to invest may be hampered.
All of the investment community is looking forward to September 20th and 21st for the next Fed meeting, but with today's numbers, we could see something sooner. Next Thursday, Fed Chairman Ben Bernanke speaks followed by President Obama. It is thought that Fed Chairman Bernanke may hint at monetary policy proposals. Perhaps President Obama may lay the groundwork for some aggressive job creation program. His efforts may be hindered as he may be construed to lay the groundwork for his next election.
The September US Dollar is technically in buy mode! The high this last week had been $75.175 and the low $73.90. The usual inverse relationship between the US Dollar and Gold is vague for the moment! In times of fear and uncertainty, the safe-haven vehicles may move in tandem. In times of no fear, the safe-haven vehicles may not warrant the interest of traders.
The ICE Futures U.S. Dollar Index (USDX®), is the international value of the US dollar and the world's most widely-recognized, publicly-traded currency index. By using the Dollar Index, traders can take advantage of moves in the value of the US dollar relative to a basket of world currencies or can hedge their portfolio of assets against the risk of a move in the US dollar in a single transaction. US Dollar Index futures are traded for 22 hours a day on the electronic trading platform of the Intercontinental Exchange (ICE).
Why am I elaborating on the US Dollar as a Gold Trader? While the US Dollar remains weighted against the six major currencies, Gold may be boosted by a variety of factors: It is purchased as a safe-haven by investors shifting from low interest bearing government bonds and other products that cannot keep up with the rate of inflation. The Gold may be traded in physical bullion, ETF's, XAU, Spider Gold Trust and futures contracts to name a few. Typically, in years past, the currency of a country could be backed by physical gold. The XAU has traded higher. The Exchange Traded Fund (GLD) was reported up.
The Gold updates Market has hit $1887.40 this week benefiting from the "0" added jobs in this morning's US Non-Farm Payrolls report. We had been in a retracement mode down to $1705.40. There was a gap left in the chart at $1644.20. It is thought that 70 % of the time that the market does come back to fill the gap, but this does not appear to be one of those times. Right now, it is all about safe-haven benefits of Gold in this horrendous financial conundrum. The Euro Zone and the United States are going through austerity measures and cuts to adhere to budget requirements. China has slowed in their growth and they had been the largest purchaser of US debt.
The Gold Market has many factors to boost its popularity right now. Seasonally, this is the time of year we purchase it anticipating the jewelry demands for Christmas. India typically buys Gold as a dowry for the brides and as an investment. The demand has not slackened and it should stay on course with the occasional retracement. $2000.00, here we come!
Crude oil are under pressure along with the spectrum of sentiment-driven assets as European shares sink, following the defensive tone noted in Asia where downward pressure after Friday’s dismal US jobs report was compounded by news that German Chancellor Angela Merkel’s CDU party suffered its fifth regional electoral defeat of the year, this time in Mecklenburg – Western Pomerania.
Traders are interpreting the result as an indication for waning German support for further Euro Zone debt crisis bailout efforts, pointing to increased instability. US and Canadian markets are closed for the Labor Day holiday today, meaning thin liquidity stands to compound volatility and may produce an exceptionally bitter start to the trading week.
As we suspected, prices moved lower after putting in a pair of Doji candlesticks below support-turned-resistance at $89.59, the June 27 wick low. Initial support from here stands at a rising trend line connecting major lows since August 9, now at $84.80. Resistance remains at $89.59.
Gold is thriving as risk aversion sweeps financial markets. As we discussed in our weekly forecast, the yellow metal is positioned to gain over the near term whether or not the current panic transforms into growing hopes for additional monetary stimulus, from the Federal Reserve and otherwise.
Indeed, if investors continue dumping risky assets, gold has scope to continue higher as a vehicle for capital preservation amid collapsing “paper” assets. Alternatively, if another week of disappointing data and an increasingly dovish lean from G10 central bankers underpins risk appetite as traders become convinced monetary support is on the way, gold is likely to remain well-supported as a tangible store-of-value alternative to increasingly abundant fiat currencies.
Prices took out resistance at $1877.15 – the 76.4% Fibonacci extension level – only to run into a barrier at rising trend lie set from the swing lows visited two weeks ago. Renewed upward momentum sees trend line resistance at $1902.73, a level closely followed by the measured Fib extension target at $1908.38. Alternatively, a break below current support exposes the 61.8% Fib at $1857.83.
While silver updates is mirroring its more expensive counterpart in its ability to capitalize on jittery financial markets, its inferior liquidity and generally more speculative trading profile is likely to see it underperform gold. Indeed, the gold/silver ratio continues to show a significant inverse relationship with the S&P 500, suggesting the cheaper metal lags at times of risk aversion. On the technical front, prices took out resistance at the Andrew’s Pitchfork midline and now threaten to challenge $37.53, the August 9 closing low. Beyond that, pitchfork top resistance stands at $45.91.
Regards,
Sure Shot Mcx Tips
Regards,
Sure Shot Mcx Tips
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