Catalonia & The Week Ahead
I said I would update on Golds position on Friday evening in my last post and there was indeed some strong change. Gold closed on Friday at 1273 per ounce against the dollar, moving almost $10 in the space of the afternoon and evening. This was a very strong rally considering there was no data release causing such a movement.
But I released today after further reading that the 'Catalan Independence Movement' issue in Spain caused much uncertainly in the forex market thus pushing investors into the save haven which is always considered to be Gold. This movement meant the bear trend holding for the majority of the week was basically destroyed in a matter of hours. I was very naive to this as the Spanish economy is big but only the 14th biggest economy my GDP size so I didn't believe this political shift would lead to such a strong consistent rally in a fairly short period of time.
Anyway, that concludes the position of Gold for the week, now to the week ahead:
In the article I am only going to talk about Monday and Tuesday as there quite a few big events this week and I don't have the time right now to write about everything(it also would drag on quite a bit).
So Monday we have just 2 events I believe could strongly effect the direction of Gold. The events are occurring at the same time of day, so it might led to a strong movement in a very short period. Firstly the Core PCE Price Index m/m is released, expected to the same as the previous month at 0.1%. Then after, the Personal Spending m/m for US consumers is released, which is looking at quite a big change. Forecast is saying 0.8% compared to last months 0.1%. Thus highlighting the strengthening US economy in the previous months which is being further illustrated through the rallying Dollar, which is continuing its strong bull trend against many of the majors especially the cable. This should emphasise the bear position I am holding in Gold. Which should mean if numbers are met we will see now a downward trend in Gold for Monday unless numbers under the forecast are experienced yet it does depend on how much it is below forecast.
Tuesday the US release their Employment Cost Index q/q and the CB Consumer Confidence. Both aren't of huge change to previous data releases so it may not lead to much strong change. However the one thing that has been clear is all data so far is expected to either be above or equal to previous time periods. The Employment Cost Index shows a forecast of 0.7%, 0.2% above last quarter while CB Consumer Confidence is also above last month. After Mondays potentially strong results which will continue to push the dollar up, Tuesday should see another continue of this trend and therefore we should see another downtrend in the Gold market. Hopefully if this is correct the short rally of Gold will stop and the bearish market will continue but the political instability in Spain highlights we really don't know what can happen.
The Naive Trader.
But I released today after further reading that the 'Catalan Independence Movement' issue in Spain caused much uncertainly in the forex market thus pushing investors into the save haven which is always considered to be Gold. This movement meant the bear trend holding for the majority of the week was basically destroyed in a matter of hours. I was very naive to this as the Spanish economy is big but only the 14th biggest economy my GDP size so I didn't believe this political shift would lead to such a strong consistent rally in a fairly short period of time.
Anyway, that concludes the position of Gold for the week, now to the week ahead:
In the article I am only going to talk about Monday and Tuesday as there quite a few big events this week and I don't have the time right now to write about everything(it also would drag on quite a bit).
So Monday we have just 2 events I believe could strongly effect the direction of Gold. The events are occurring at the same time of day, so it might led to a strong movement in a very short period. Firstly the Core PCE Price Index m/m is released, expected to the same as the previous month at 0.1%. Then after, the Personal Spending m/m for US consumers is released, which is looking at quite a big change. Forecast is saying 0.8% compared to last months 0.1%. Thus highlighting the strengthening US economy in the previous months which is being further illustrated through the rallying Dollar, which is continuing its strong bull trend against many of the majors especially the cable. This should emphasise the bear position I am holding in Gold. Which should mean if numbers are met we will see now a downward trend in Gold for Monday unless numbers under the forecast are experienced yet it does depend on how much it is below forecast.
Tuesday the US release their Employment Cost Index q/q and the CB Consumer Confidence. Both aren't of huge change to previous data releases so it may not lead to much strong change. However the one thing that has been clear is all data so far is expected to either be above or equal to previous time periods. The Employment Cost Index shows a forecast of 0.7%, 0.2% above last quarter while CB Consumer Confidence is also above last month. After Mondays potentially strong results which will continue to push the dollar up, Tuesday should see another continue of this trend and therefore we should see another downtrend in the Gold market. Hopefully if this is correct the short rally of Gold will stop and the bearish market will continue but the political instability in Spain highlights we really don't know what can happen.
The Naive Trader.
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