Is Gold Holding?
The week we have just witnessed has been very interesting. Many outcomes as always continued to surprise me, I have heard the chat about the continued rise in bitcoin, hitting unprecedented levels of over $6000 yesterday.
But because of this it means many other interesting movements have taken place throughout the week in over hugely volatile markets such as Crude oil. On Wednesday US crude oil inventories were released, with actual being a million more decline than expected. With actual being -5.7m compared to the -4.7m that was expected. This as you would expect should case a huge upshift in crude oil prices, but no, this decline was met with decline in price, falling from just over $52.2 a barrel down to $51.6m minutes later which is hugely confusing. Why does the decline in production lead to this, I really don't know, but if anyone were to have a greater understanding I would welcome it.
Wednesday indeed was a busy day, with further data coming from the US and UK. Building permits this month for the US were released. The forecast believed there would be a decline from the month before, of 1.25m as the forecast. But when released the actual numbers showed the numbers to be actually 1.22m(Forex Factory, 2017). This is very interesting as I just assumed numbers would be up after the events that have been taking place in US for the last few months. This unexpected fall lead to the dollar falling against the Canadian Dollar to 1.252 on Wednesday afternoon. But after a strong bull trend the dollar spent the next 2 days rallying strongly upwards, closing on Friday on a week high of 1.26245.
The UK did exactly the opposite of what I most hoped, all we witnessed was the continued down fall of the pound, Average Earnings were released Wednesday, which was just over forecast at 2.2% compared to the 2.1% forecasted(Forex Factory, 2017). This led to a very small increase for the pound against the dollar and euro. I thought this would provide hope for a long-term bullish market for the pound however this doesn't seem to be possible, the pound is currently just a dying currency However not all good would follow, on Wednesday the pound dipped almost a whole cent against the dollar, falling to 1.317 before holding steady.
Furthermore during the same time period the unemployment rate was released, holding at 4.3%, with no change from the forecast. This shows the UK is experiencing a surprisingly good period which is weird to think considering how shit the pound is doing, making it seem as though there is hope in the British economy potentially.
However once again the just seem to make any difference, the GBP/USD continues to experience difficulty, by Friday morning the the exchange hit 1.308 before rebounding into a nice bull position for the rest of Friday where it closed at 1.31890. But it is incredible just how unpredictable the pound is at the moment, we genuinely have no idea making it even more interesting to try to follow and predict.
Moving on, we now come into Thursday, where the US released their weekly unemployment claims, with the actually being the opposite way to the forecast, thus allowing the dollar to rally. This was brilliant for my Gold shorting position, gold falling from 1305 at the start of the week to close at 1279.94 on Friday. I believe the good decline in crude inventory plus the unemployment claims being so strong (18k below the forecast of 240k) it has helped push gold in a bear position I am not sure how far this will continue, for the last weeks gold has held within quite a small spectrum, sitting from 1260-1310. So I don't know if strong data this coming week could shift it out this bracket, or whether it shall continue to hold.
But because of this it means many other interesting movements have taken place throughout the week in over hugely volatile markets such as Crude oil. On Wednesday US crude oil inventories were released, with actual being a million more decline than expected. With actual being -5.7m compared to the -4.7m that was expected. This as you would expect should case a huge upshift in crude oil prices, but no, this decline was met with decline in price, falling from just over $52.2 a barrel down to $51.6m minutes later which is hugely confusing. Why does the decline in production lead to this, I really don't know, but if anyone were to have a greater understanding I would welcome it.
Wednesday indeed was a busy day, with further data coming from the US and UK. Building permits this month for the US were released. The forecast believed there would be a decline from the month before, of 1.25m as the forecast. But when released the actual numbers showed the numbers to be actually 1.22m(Forex Factory, 2017). This is very interesting as I just assumed numbers would be up after the events that have been taking place in US for the last few months. This unexpected fall lead to the dollar falling against the Canadian Dollar to 1.252 on Wednesday afternoon. But after a strong bull trend the dollar spent the next 2 days rallying strongly upwards, closing on Friday on a week high of 1.26245.
The UK did exactly the opposite of what I most hoped, all we witnessed was the continued down fall of the pound, Average Earnings were released Wednesday, which was just over forecast at 2.2% compared to the 2.1% forecasted(Forex Factory, 2017). This led to a very small increase for the pound against the dollar and euro. I thought this would provide hope for a long-term bullish market for the pound however this doesn't seem to be possible, the pound is currently just a dying currency However not all good would follow, on Wednesday the pound dipped almost a whole cent against the dollar, falling to 1.317 before holding steady.
Furthermore during the same time period the unemployment rate was released, holding at 4.3%, with no change from the forecast. This shows the UK is experiencing a surprisingly good period which is weird to think considering how shit the pound is doing, making it seem as though there is hope in the British economy potentially.
However once again the just seem to make any difference, the GBP/USD continues to experience difficulty, by Friday morning the the exchange hit 1.308 before rebounding into a nice bull position for the rest of Friday where it closed at 1.31890. But it is incredible just how unpredictable the pound is at the moment, we genuinely have no idea making it even more interesting to try to follow and predict.
Moving on, we now come into Thursday, where the US released their weekly unemployment claims, with the actually being the opposite way to the forecast, thus allowing the dollar to rally. This was brilliant for my Gold shorting position, gold falling from 1305 at the start of the week to close at 1279.94 on Friday. I believe the good decline in crude inventory plus the unemployment claims being so strong (18k below the forecast of 240k) it has helped push gold in a bear position I am not sure how far this will continue, for the last weeks gold has held within quite a small spectrum, sitting from 1260-1310. So I don't know if strong data this coming week could shift it out this bracket, or whether it shall continue to hold.
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