The Dow Jones Effect.
Damn, what a crazy week it has been, the decline of Golds value has almost been quite impressive. The fall of the Dow has lead to quite a negative impact throughout markets, falling over 1000 points on the Monday trading period alone! This really isn't surprising, markets have been roaring for years now and a correction did seem imminent. But what is interesting is how this dip effects the Gold market.
Monday saw the release of the UK's Service PMI, which came in under forecast by over a point and then the US ISM Manufacturing PMI came out over 3 points above forecast. So this should see a dip in the cable market but also a rally in the USD/JPY market, bhowever this was never witnessed as the falling Dow took priority, creating a strong retreat for the US dollar and thus helped Gold climb back up to the $1340 mark before close.
Tuesday, saw an incredible dip, with no real reason in regards to data release, the negative results from Australia early in the morning had little effect on the days direction. It did cause a short dip however this dip was countered shortly after, and Gold continued rallying up to $1344 by late morning before beginning its dramatic fall. The only release during the later day was the Canadian Trade Balance which was almost a billion over estimates, which is big but it doesn't make sense to see such a dip caused by this singular event. I believe the rebound in the Dow of over 500 points had a effect but I don't know if this could really cause the whole dip, maybe it is possible because the rebound led investors to believe this was a quick market correction and thus they re-invest into forex, specifically the US Dollar, maybe. But by close we saw a huge $15 decline, which would of been worse if the New Zealand releases weren't so positive.
Wednesday's movement was strongly affected by the continue rise of the US dollar, and thus we saw the continuing of a bearish direction this week. We saw a few releases from New Zealand during the later day which were bang on forecast so shouldn't of caused much movement and thus its clear the bulls and pushing into the US dollar as it stay under 110 against the JPY, offering a lot of opportunity for profit I believe. By the end of Wednesday was saw another fall, down to $1315, a $10 decline.
Thursday was a busy day for the BOE, with numerous important releases coming out in the afternoon. Their inflation Report, voting on the Official Bank Statement and and then of course the Official Bank Rate. Outrage to say, nothing very exciting happened, all forecasts were bang on and the Bank rate was held at 0.50%.. These accurate releases helped Gold finish the day above open, closing at $1322.
Friday now, and actually like Thursday its been quiet, I feel the slight recovery of the Dow and reduced stress levels in traders has helped people believe the markets are evening out, as it did seem they were a wee bit bloated to be honest. But Gold is still moving fairly dramatically even without many releases, we have seen an $8 fall so far and who knows how fair it is continuing to go.
This week has been surprisingly bad, looking into this week nothing seemed too precarious when researching the releases the events coming up this week but the dipping Dow caused unseen volatility and decline. But because of this it is hard to clarify how influential each release has been this week or whether Gold movement has just been a reflection of the dipping Dow Jones.
Peace.
The Naive Trader
Forex Factory, 2018
IG.com, 2018
Investing.com, 2018
Monday saw the release of the UK's Service PMI, which came in under forecast by over a point and then the US ISM Manufacturing PMI came out over 3 points above forecast. So this should see a dip in the cable market but also a rally in the USD/JPY market, bhowever this was never witnessed as the falling Dow took priority, creating a strong retreat for the US dollar and thus helped Gold climb back up to the $1340 mark before close.
Tuesday, saw an incredible dip, with no real reason in regards to data release, the negative results from Australia early in the morning had little effect on the days direction. It did cause a short dip however this dip was countered shortly after, and Gold continued rallying up to $1344 by late morning before beginning its dramatic fall. The only release during the later day was the Canadian Trade Balance which was almost a billion over estimates, which is big but it doesn't make sense to see such a dip caused by this singular event. I believe the rebound in the Dow of over 500 points had a effect but I don't know if this could really cause the whole dip, maybe it is possible because the rebound led investors to believe this was a quick market correction and thus they re-invest into forex, specifically the US Dollar, maybe. But by close we saw a huge $15 decline, which would of been worse if the New Zealand releases weren't so positive.
Wednesday's movement was strongly affected by the continue rise of the US dollar, and thus we saw the continuing of a bearish direction this week. We saw a few releases from New Zealand during the later day which were bang on forecast so shouldn't of caused much movement and thus its clear the bulls and pushing into the US dollar as it stay under 110 against the JPY, offering a lot of opportunity for profit I believe. By the end of Wednesday was saw another fall, down to $1315, a $10 decline.
Thursday was a busy day for the BOE, with numerous important releases coming out in the afternoon. Their inflation Report, voting on the Official Bank Statement and and then of course the Official Bank Rate. Outrage to say, nothing very exciting happened, all forecasts were bang on and the Bank rate was held at 0.50%.. These accurate releases helped Gold finish the day above open, closing at $1322.
Friday now, and actually like Thursday its been quiet, I feel the slight recovery of the Dow and reduced stress levels in traders has helped people believe the markets are evening out, as it did seem they were a wee bit bloated to be honest. But Gold is still moving fairly dramatically even without many releases, we have seen an $8 fall so far and who knows how fair it is continuing to go.
This week has been surprisingly bad, looking into this week nothing seemed too precarious when researching the releases the events coming up this week but the dipping Dow caused unseen volatility and decline. But because of this it is hard to clarify how influential each release has been this week or whether Gold movement has just been a reflection of the dipping Dow Jones.
Peace.
The Naive Trader
Forex Factory, 2018
IG.com, 2018
Investing.com, 2018
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