Geopolitical tensions
I thought I would do an update of whats happened so far this week. I must say that I was right in regards to the direction on Monday and Tuesday for Gold prices which is pretty cool.
Monday saw the release of the the New Zealand Inflation Expectation quarterly which was just under forecast at 2.0%. While Mr Draghi spoke and the Canadian Ivy PMI was released, with the figure being fairly strongly above forecast at 63.8 compared to forecast of 60.2(Forex Factory, 2017), which highlights the constant growth in the Canadian economy. This will have helped dip the Dollar a little however the main factor causing Gold to rally was once again not related to the data release but the political corruption scandals in Saudi Arabia. Where '11 princes and dozens of bureaucrats stand accused of corruption'(Bloomberg, 2017). This causes instability in markets and thus investors move into the 'safe haven' of Gold while the purging is sorted. This purging helped shift Gold up fairly heavily, opening at about 1270, and hitting highs after the opening of the US market of 1282$ before retreating a little. I believe this was further helped by the Dollars dip against the Yen on Monday which seems to be a much better variable to compare against than cable.
As I stated on Sunday this week really isn't too busy, but there is still much to talk about about. Tuesday saw the release of the Halifax HPI m/m for the UK, which was just above forecast at 0.3%. This didn't do much for the cable, holding around 1.30 against the dollar which is ok I guess considering the last week and a half haven't been too good for British politics. However because of the lack of data released Tuesday's Gold price fluctuations I believe were more due to FX reactions as well as Trumps deadly trip to Asia. Yet the US consumer credit m/m data was released late into the evening, which showed an increase against forecast and helped push down Gold to levels around 1273$ per troy ounce before closing at 1277$. So Tuesday did have a weird kinda bear movement but now onto Wednesday.
First release of Wednesday was China's Trade Balance, I am not sure about the exact implications however it did come in under forecast at 254B compared to 275B. Which is still such a huge surplus I can't see it having that much effect. However online I found this, 'geopolitical tensions with North Korea and the Middle East prompted investors to flock to safer assets' (Investing.com, 2017). Which makes a lot of sense. This helped keep the Gold shifting into what seems to be a bull position and hitting a high of 1286$ in Wednesday afternoon. Yet because of these continuing issues the Canadian Housing starts & Building Permits which both offered strong results didn't really do much to the market even though Building Permits were 3.1% above the forecast at 3.8%. Further highlighting how important it is to continue to watch and monitor Mr Trumps movement.
That basically sums up whats happened so far but for the week ahead I am going to take a gamble yet I reckon because of the political tension in Asia stated above with the Middle East and North Korea it could continue to push up the value of Gold, so Thursday and Friday might see a strong Bull trend and levels of $1290 or maybe even $1300 could be seen.
The Naive Trader.
Monday saw the release of the the New Zealand Inflation Expectation quarterly which was just under forecast at 2.0%. While Mr Draghi spoke and the Canadian Ivy PMI was released, with the figure being fairly strongly above forecast at 63.8 compared to forecast of 60.2(Forex Factory, 2017), which highlights the constant growth in the Canadian economy. This will have helped dip the Dollar a little however the main factor causing Gold to rally was once again not related to the data release but the political corruption scandals in Saudi Arabia. Where '11 princes and dozens of bureaucrats stand accused of corruption'(Bloomberg, 2017). This causes instability in markets and thus investors move into the 'safe haven' of Gold while the purging is sorted. This purging helped shift Gold up fairly heavily, opening at about 1270, and hitting highs after the opening of the US market of 1282$ before retreating a little. I believe this was further helped by the Dollars dip against the Yen on Monday which seems to be a much better variable to compare against than cable.
As I stated on Sunday this week really isn't too busy, but there is still much to talk about about. Tuesday saw the release of the Halifax HPI m/m for the UK, which was just above forecast at 0.3%. This didn't do much for the cable, holding around 1.30 against the dollar which is ok I guess considering the last week and a half haven't been too good for British politics. However because of the lack of data released Tuesday's Gold price fluctuations I believe were more due to FX reactions as well as Trumps deadly trip to Asia. Yet the US consumer credit m/m data was released late into the evening, which showed an increase against forecast and helped push down Gold to levels around 1273$ per troy ounce before closing at 1277$. So Tuesday did have a weird kinda bear movement but now onto Wednesday.
First release of Wednesday was China's Trade Balance, I am not sure about the exact implications however it did come in under forecast at 254B compared to 275B. Which is still such a huge surplus I can't see it having that much effect. However online I found this, 'geopolitical tensions with North Korea and the Middle East prompted investors to flock to safer assets' (Investing.com, 2017). Which makes a lot of sense. This helped keep the Gold shifting into what seems to be a bull position and hitting a high of 1286$ in Wednesday afternoon. Yet because of these continuing issues the Canadian Housing starts & Building Permits which both offered strong results didn't really do much to the market even though Building Permits were 3.1% above the forecast at 3.8%. Further highlighting how important it is to continue to watch and monitor Mr Trumps movement.
That basically sums up whats happened so far but for the week ahead I am going to take a gamble yet I reckon because of the political tension in Asia stated above with the Middle East and North Korea it could continue to push up the value of Gold, so Thursday and Friday might see a strong Bull trend and levels of $1290 or maybe even $1300 could be seen.
The Naive Trader.
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