Very Bearish, But for how long?

This week is busy and it honestly looks terrible for Gold, but anyway, we must discuss and work out how to decide how far in what direction it looks to be taking.

Monday is quiet thank god with nothing happening worth discussing, being very stable for Gold. Holding at around the $1249-$1250 position so far today, so at least its not going down any further! The upcoming FOMC meeting helped lift God just above $1250 today before currently sitting just below that now.

Tuesday we have the UK's CPI yearly release, expected to be at 3.0%, which is the same for last year. Inflation being this high is quite dangerous so it might further damage Gold's position. Later on we have the US's PPI m/m result, which is forecast to be the same as last months 0.4%, highlighting growth yet it is small. While later in the evening we have Draghi speaking at an event in Frankfurt, and thus we will see a very volatile period and I wouldn't be surprised if we see even lower levels hit before midweek!

Midweek and boy is it a busy day, Wednesday has Britain's Average Earnings Index monthly which is looking above last month at 2.5%. Honestly nice to see something positive coming out of the UK, so this might help reduce the negativity surrounding the cable for a few hours maybe...

While later we have numerous data releases in the US, such as: Core CPI m/m, FOMC Statement and Federal Funds Rate. All huge releases and 100% will cause Gold to go below $1240. Core CPI is forecast to be at 0.4%, compared to last months 0.1%. Which should be very positive for the Dollar and thus bad for the Cable and Mr Gold. While the Fed Interest Rate hike is terrible haha, if you are a bull trader, it is looking to be up to 1.5%, from, 1.25%. As Interest Rates negativity effect Gold because an increase gives investors a better return in that currency and thus it will boost demand for the Dollar and reduce demand for Gold.

Thursday is another busy day, US and UK once again releasing numerous data. We have the the Bank of England meeting to discuss and decide on Interest Rates, we are seeing a forecast of no change in Interest Rate so this effect will be small yet it depends on how many vote for this. If the 9 voters don't all side with this we will see some movements in them market and this will lead to a shift in the cable yet I don't know how strongly this will effect the Gold value.

Later on there is the US data release of the Core Retail Sales m/m, Retail Sales m/m and the Unemployment Claims. We are seeing forecasts all above previous months and if hit a nice up-shift in the Green Back will be seen for sure, and therefore Gold will continue to dip, but how far I really don't know. 

But beyond this, the constant movement towards a Tax Reform and Monetary Policy Tightening are just destroying Gold's long-term bull rally. So I don't see any good happening for Bulls in the next couple of weeks but I hope I am wrong as I still have positions open holding a buy.

Anyway, Friday now and its much quieter with nothing worth looking into so hopefully we will have a stable day for Gold. But the level it will be hovering at is so unknown. I don't see anything above $1250 this week sadly just because of positive Data releases for the Green back and the political discussions constantly taking place.

The Naive Trader


Peace out.