I know it's mid-August, but it indeed feels like Ground Hog Day with Precious Metals trapped on a merry-go-round of negativity where stronger economic data in the U.S. reaffirms the Fed's "higher for longer" theme that strengthens the U.S. Dollar and pushes yields higher. Then in the overnight sessions, we get a series of weak Asian data where calls for China to "do something" get louder and louder. China then responds with minor accommodative measures to prop up the Copper market, Silver attempts to follow, and then the day session begins with a stronger U.S. data release. You get the picture, the Dollar rallies, Yields move higher, Gold retreats. The cycle may break this week with Thursday's Jackson Hole symposium, where comments from Jerome Powell may give some indication that the interest rate hike cycle is over.
Gold futures are trading near five-month lows, and as a "zero-yielding asset," it's tough to make its bull case, especially with debt instruments yielding 5% everywhere. Seasonally, Gold tends to bottom in the middle of August and has historically recovered until the end of the month. The weakness in U.S. Equities may drive investors into the safety of debt instruments, ultimately taking yields lower and boosting Gold. The chart pattern suggests that futures must close back above $1951 to carve out a bottom. It will take a move back above $1983 to switch the bearish trend back to neutral.
www.tradingview.com/cme/
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out CME Group data plans available that suit your trading needs.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Gold futures are trading near five-month lows, and as a "zero-yielding asset," it's tough to make its bull case, especially with debt instruments yielding 5% everywhere. Seasonally, Gold tends to bottom in the middle of August and has historically recovered until the end of the month. The weakness in U.S. Equities may drive investors into the safety of debt instruments, ultimately taking yields lower and boosting Gold. The chart pattern suggests that futures must close back above $1951 to carve out a bottom. It will take a move back above $1983 to switch the bearish trend back to neutral.
www.tradingview.com/cme/
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out CME Group data plans available that suit your trading needs.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.