Gold May Test Upper Limit Next Week

週五, 19 五 2017 15:00

Gold ends it session at USD $1255.75 on Friday amid a relatively quiet week for global economic news. The driving force behind gold remains in the market throughout the week and we may see more uptrend for gold in the following weeks. Silver trades at USD$16.80 per oz, a great bargain commodity for bullion investors.

Gold prices gained upside momentum due to weak US dollar and US political risks. Investors expect bullish gold market in the near term and hold steady with Fed’s June rate decision. We find that the bullish momentum out-weighted the Federal Reserve monetary policy minutes, hence the uptrend prediction in gold prices dominated the week and near term momentum.

In the foreign exchange market, CAD gained solid grounds this week and trades at 1.351 against USD. Technically, we may see lower USD next week as suggested by technical indicators. We expect USDCAD to bottom out at 1.347 in the near term.  

 

Watchlist

  • US Federal Reserve minutes
  • US President Donald Trump political risks
  • US fiscal stimulus and tax reform
  • Gold Moving-average technical chart

Gold is Sensitive to the Strength of US Dollar

週三, 11 一月 2017 15:46

Gold hits $1197.5 per oz to a 6-week high today after US president-elect Donald Trump’s first press conference. The lack of new economic details on US economic and fiscal policy helped support the bullion market significantly. On the other hand, US equity market suffers from the uncertainties in the near term. At this point, the gold market is enjoying capital inflows from the bonds and equities. We are expecting a bullish gold market in the short run amid all the questionable US economic policies that will be brought forward by the president-elect. Recently, gold is trading inversely to US dollar strength and we continue to monitor US dollar index to find clues for the gold prices. We are expecting spot gold trading at $1204 - $1225 per oz in the short term and USCAD  exchange rate ranging at 1.303 -1.320. 

Roller Coaster Ride Is Not Over Yet

週三, 09 十一月 2016 14:52

After many busy days and nights, gold trades at approximately $1277 per oz throughout the day after the big gain we witnessed during the US election.  Gold was at a six week high of $1338 per oz due to the risk-off mode in the market. Market participants flee to the bullion market as safe haven. But risk appetite quickly returned and pushed gold down to $1270 per oz on Wednesday morning.

With the surprising victory of Donald Trump , we believe that this is only the start of a volatile market. We have yet to imagine how Donald Trump can bring stability back to the marketplace with his administration in the near future. There will also be fundamental changes in many different markets and US Fed may also change course and direction with their anticipated December rate hike. While there is large degree of uncertainties with Donald Trump’s administration, investors and traders are sure to overreact and send all financial market haywire until market confidence is restored.

 

Watchlist

  • US Fed December Rate decision
  • Foreign currency situation relative to US dollar

 

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Gold Edges Lower to $1308 while US Labor Market in Focus

週三, 31 八月 2016 14:38

Gold is trading at $1308.8 per oz on Wednesday afternoon session while traders wait for Friday’s non-farm payroll data. We have seen columnists trying to fit in their very own formula for the recent price volatility and risk appetite in the market. While the market have been fighting to figure out what the US Fed may do in the 4th quarter , we are still standing behind our own belief that a rate hike is coming. US dollar index is on the uptrend while market participants await for US jobless claims, USDCAD is trading at 1.3101 in the afternoon session. In the bullion market, we anticipate gold to settle above $1300 per oz  while US dollar index may experience more volatility this week, Silver will gain positive momentum due to higher demand and trading volume. Despite the growing hopes of a rate hike in the near future, we believe gold will be trading between $1300-$1312 per oz. 

 

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Two Big Problems: Brexit Uncertainty and Bond Yields

週五, 10 六月 2016 10:44

Gold is trading at $1271 per oz on Friday session ahead of all the problems in UK referendum vote. Traders are piling in the gold market due to the shift of risk appetite while the US Fed faces challenges in rate hikes.  At this moment, we believe the rate hike topic will remain, as one of the major impact in gold price, and UK referendum results will act as a price booster in the gold market. In the US market, traders are worried with the declining bond yield to record lows. While market signals more monetary tightening in the near future, we are not surprised to see a gradual rate hike starting in the 4th quarter. We expect gold to be resilience to global headwinds and trades between $1280-$1320 in the near-term , and stress that physical gold is an important safe haven asset during financial instability times. 

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