Even Though we totally understand the underlying risk in our current short position in gold however there is still significant potential for markets to be disappointed come September and for gold to fall.Analyzing all the risk involved in the trade,we have finally decided to excute the following trade keeping the long term macro drive.wps.com/d/AJvw8O3S2oQugZjCj5GdFA
and enormous risk and reward ratio in mind although we suggest you to do your own research before adding any position to your portfolio especially the current one-
Asset: XAUUSD ( GOLD )
Sell Stop Entry Price:1500
Take Profit: 1250
Stop Loss:1560(we will reduce the stop loss points once positions will be more favorable)
Capital risk:$3000(4%)
Potential Gain:$15000
Risk/Reward: 1:5
Gold prices are scoring gains of over $24 an ounce in late-morning trading Friday. It appears the U.S.-China trade war has kicked into a higher gear after China announced new trade tariffs on the U.S., while President Trump retaliated in a series of threatening tweets that included one demand that U.S. businesses stop doing business with China. Trump also asked in a tweet who was the bigger enemy: China's President Xi or the Federal Reserve . All of this has unnerved the marketplace heading into the weekend. And all of this is bullish for safe-haven gold . December gold was last up $23.60 at $1,532.10.The U.S.-China trade war is heating up and gold is shining bright with next week's events likely to offer more upside potential as gold heads further north of $1,500 an ounce.
After waiting for direction all week, the yellow metal finally made a move, surging nearly 2% on Friday, driven by the U.S.-China trade war comments, and a dovish-enough Federal Reserve . December Comex gold futures were last at $1,534.60, up 1.73% on the day.
The U.S. President Donald Trump unnerved the markets Friday with his tweets that promised to respond to China's retaliatory tariffs in the afternoon while heavily criticizing the Federal Reserve .
"We don't need China and, frankly, would be far better off without them … Our great American companies are hereby ordered to immediately start looking for an alternative to China … I will be responding to China's Tariffs this afternoon," Trump tweeted.As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly … My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" another tweet read.
Analysts are carefully watching how this trade rhetoric escalates next week. "Trump tweeted that we don't need China altogether. It looks like additional tariffs will be implemented, stock markets should continue to sell-off. Safe-haven assets like the Swiss franc , bonds, gold , and silver should all benefit from that," Streible said.
Trump's response came after China announced retaliatory tariffs against $75 billion worth of U.S. goods, imposing additional tariffs of 5% or 10% on a total of 5,078 American products that will come into effect on September 1 and December 15.
Powell's comments and Fed's September meeting
Earlier in the day, the markets were digesting the highly anticipated Fed Chair Jerome Powell's speech at the Jackson Hole, which was relatively low-key. Powell stressed that the U.S. economy was in a "favorable place" and pledged that Fed will continue to "act as appropriate."
The chair's speech opened the door to a September rate cut while walking back expectations of a more aggressive easing, analysts said.
"Powell seems to have walked the line fairly decently. We saw the probability of 50-basis-point cut go from 40% to near zero today. Speakers before Powell did well to set the tone,".
For Powell, it was a balancing act of not promising too much and still acknowledging the market's concerns.
"Powell stuck with what he was saying at the last FOMC, where he signaled more mid-cycle adjust-type cuts. But, he also did enough to please the market in terms of recognizing that things have been 'eventful' since the last meeting and that Hong Kong, Brexit, growth concerns, and trade remain a worry and the Fed may need to be flexible enough to act appropriately.
Market participants felt some relief that Powell was more dovish than some of the other Fed members, noted Capital Economics senior commodities economist Ross Strachan.
"There is no clarity around what will happen at the next Fed meeting. We are expecting a cut and it seems likely that it is still going to happen. "Gold's move after the September Fed decision will depend on communication that accompanies it."
There is still significant potential for markets to be disappointed come September and for gold to fall.
The precious metal can remain above $1,500 an ounce, but some headwinds are coming in, especially when it comes to weak Asia demand.
"Increasingly got a stronger headwind of weak Asian demand from both India and China. In order to maintain prices and go higher, there needs to be strong continued interest from Western investors. Given the global macro uncertainty, that could continue to be the case. But, in the short-term, we saw very dramatic fall in bond yields and there is clearly scope for some of that move to unwind and that could put some downward pressure on gold ."
The ECB and the U.S. dollar
Aside from all the Fed talk, ECB's minutes from the July meeting showed that the central bank will be unveiling a hefty easing policy in September, which could have a significant impact on gold as well.
"A 'bazooka' of monetary stimulus from the ECB is set to push EU yields deeper into negative territory. After all, playing hot-potato with negatively yielding European debt isn't particularly risky, when you can unload your potatoes on your friendly central banker.
In this environment, U.S. yields are also looking to head lower.U.S. yields would eventually return on their downward trajectory, suggesting that gold's luster would once again reappear.
What to watch next week
Aside from the all the trade jitters, data will be one of the main drivers for gold next week with the focus largely set on the U.S. GDP and PCE numbers.
"There is a lot of data next week, which will be the next major driver for gold . "All eyes will be how the data evolves heading into the next FOMC meeting. GDP and PCE numbers next week will be key."
The GDP data for Q2 is scheduled to be released on Thursday while the PCE figures are due out Friday. Some other key U.S. releases include durable goods, consumer confidence, and housing data.
and enormous risk and reward ratio in mind although we suggest you to do your own research before adding any position to your portfolio especially the current one-
Asset: XAUUSD ( GOLD )
Sell Stop Entry Price:1500
Take Profit: 1250
Stop Loss:1560(we will reduce the stop loss points once positions will be more favorable)
Capital risk:$3000(4%)
Potential Gain:$15000
Risk/Reward: 1:5
Gold prices are scoring gains of over $24 an ounce in late-morning trading Friday. It appears the U.S.-China trade war has kicked into a higher gear after China announced new trade tariffs on the U.S., while President Trump retaliated in a series of threatening tweets that included one demand that U.S. businesses stop doing business with China. Trump also asked in a tweet who was the bigger enemy: China's President Xi or the Federal Reserve . All of this has unnerved the marketplace heading into the weekend. And all of this is bullish for safe-haven gold . December gold was last up $23.60 at $1,532.10.The U.S.-China trade war is heating up and gold is shining bright with next week's events likely to offer more upside potential as gold heads further north of $1,500 an ounce.
After waiting for direction all week, the yellow metal finally made a move, surging nearly 2% on Friday, driven by the U.S.-China trade war comments, and a dovish-enough Federal Reserve . December Comex gold futures were last at $1,534.60, up 1.73% on the day.
The U.S. President Donald Trump unnerved the markets Friday with his tweets that promised to respond to China's retaliatory tariffs in the afternoon while heavily criticizing the Federal Reserve .
"We don't need China and, frankly, would be far better off without them … Our great American companies are hereby ordered to immediately start looking for an alternative to China … I will be responding to China's Tariffs this afternoon," Trump tweeted.As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly … My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" another tweet read.
Analysts are carefully watching how this trade rhetoric escalates next week. "Trump tweeted that we don't need China altogether. It looks like additional tariffs will be implemented, stock markets should continue to sell-off. Safe-haven assets like the Swiss franc , bonds, gold , and silver should all benefit from that," Streible said.
Trump's response came after China announced retaliatory tariffs against $75 billion worth of U.S. goods, imposing additional tariffs of 5% or 10% on a total of 5,078 American products that will come into effect on September 1 and December 15.
Powell's comments and Fed's September meeting
Earlier in the day, the markets were digesting the highly anticipated Fed Chair Jerome Powell's speech at the Jackson Hole, which was relatively low-key. Powell stressed that the U.S. economy was in a "favorable place" and pledged that Fed will continue to "act as appropriate."
The chair's speech opened the door to a September rate cut while walking back expectations of a more aggressive easing, analysts said.
"Powell seems to have walked the line fairly decently. We saw the probability of 50-basis-point cut go from 40% to near zero today. Speakers before Powell did well to set the tone,".
For Powell, it was a balancing act of not promising too much and still acknowledging the market's concerns.
"Powell stuck with what he was saying at the last FOMC, where he signaled more mid-cycle adjust-type cuts. But, he also did enough to please the market in terms of recognizing that things have been 'eventful' since the last meeting and that Hong Kong, Brexit, growth concerns, and trade remain a worry and the Fed may need to be flexible enough to act appropriately.
Market participants felt some relief that Powell was more dovish than some of the other Fed members, noted Capital Economics senior commodities economist Ross Strachan.
"There is no clarity around what will happen at the next Fed meeting. We are expecting a cut and it seems likely that it is still going to happen. "Gold's move after the September Fed decision will depend on communication that accompanies it."
There is still significant potential for markets to be disappointed come September and for gold to fall.
The precious metal can remain above $1,500 an ounce, but some headwinds are coming in, especially when it comes to weak Asia demand.
"Increasingly got a stronger headwind of weak Asian demand from both India and China. In order to maintain prices and go higher, there needs to be strong continued interest from Western investors. Given the global macro uncertainty, that could continue to be the case. But, in the short-term, we saw very dramatic fall in bond yields and there is clearly scope for some of that move to unwind and that could put some downward pressure on gold ."
The ECB and the U.S. dollar
Aside from all the Fed talk, ECB's minutes from the July meeting showed that the central bank will be unveiling a hefty easing policy in September, which could have a significant impact on gold as well.
"A 'bazooka' of monetary stimulus from the ECB is set to push EU yields deeper into negative territory. After all, playing hot-potato with negatively yielding European debt isn't particularly risky, when you can unload your potatoes on your friendly central banker.
In this environment, U.S. yields are also looking to head lower.U.S. yields would eventually return on their downward trajectory, suggesting that gold's luster would once again reappear.
What to watch next week
Aside from the all the trade jitters, data will be one of the main drivers for gold next week with the focus largely set on the U.S. GDP and PCE numbers.
"There is a lot of data next week, which will be the next major driver for gold . "All eyes will be how the data evolves heading into the next FOMC meeting. GDP and PCE numbers next week will be key."
The GDP data for Q2 is scheduled to be released on Thursday while the PCE figures are due out Friday. Some other key U.S. releases include durable goods, consumer confidence, and housing data.
Comment:
President Trump said Sunday the U.S. and Japan had reached a trade deal “in principle” that would pave the way for more U.S. farm exports to Japan, while dropping the threat of increased U.S. tariffs on Japanese cars, as US reaches trade deal with Japan This could have a direct effect on the precious metals prices in a negative manner
Comment:
Gold prices posted slight gains and hit a 6.5-year high in overnight trading, while the silver market saw solid gains and hit a two-year high. Geopolitics is on the front burner of the market place early this week, which is helping to lift the safe-haven metals. Their technical postures are also fully bullish, which continues to invite the chart-based buyers. December gold futures were last up $0.90 an ounce at 1,538.50. December Comex silver prices were last up $0.231 at $17.785 an ounce.
The unexpected twists and turns in the U.S.-China trade war continued today, as President Trump early this morning said Chinese trade officials called U.S. trade officials Sunday evening to restart discussions. Trump said China “wants to make a deal” and “that’s a great thing.” Chinese officials, when questioned on the matter, were murky on whether a telephone call actually took place. Still, the gold market backed way down from its overnight high of $1,565.00, basis December futures. Meantime, markets in Asia and Europe that were under selling pressure early on rebounded when the Trump news hit the news wires. U.S. stock indexes are solidly up at midday. The surprise news Monday comes after Trump on Friday unleashed a barrage of negative tweets on China, including “demanding” that U.S. businesses leave there.
Tensions in Hong Kong remain high amid civil unrest there. Reports said weekend clashes between protesters and police escalated, including protesters throwing rocks and police using water cannons.
The weekend G-7 summit in Paris produced nothing major that the marketplace deemed as price-sensitive. Trump had a chance to meet with Iran’s foreign minister who showed up unexpectedly, but declined to do so.
In other overnight news, the closely watched German Ifo business conditions index in August fell to 94.3 versus expectations of a reading of 95.1. This report falls in line with reports coming out of the world’s major economies that show generally slowing global economic growth.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $53.75 a barrel. The U.S. dollar index is solidly higher today.
The unexpected twists and turns in the U.S.-China trade war continued today, as President Trump early this morning said Chinese trade officials called U.S. trade officials Sunday evening to restart discussions. Trump said China “wants to make a deal” and “that’s a great thing.” Chinese officials, when questioned on the matter, were murky on whether a telephone call actually took place. Still, the gold market backed way down from its overnight high of $1,565.00, basis December futures. Meantime, markets in Asia and Europe that were under selling pressure early on rebounded when the Trump news hit the news wires. U.S. stock indexes are solidly up at midday. The surprise news Monday comes after Trump on Friday unleashed a barrage of negative tweets on China, including “demanding” that U.S. businesses leave there.
Tensions in Hong Kong remain high amid civil unrest there. Reports said weekend clashes between protesters and police escalated, including protesters throwing rocks and police using water cannons.
The weekend G-7 summit in Paris produced nothing major that the marketplace deemed as price-sensitive. Trump had a chance to meet with Iran’s foreign minister who showed up unexpectedly, but declined to do so.
In other overnight news, the closely watched German Ifo business conditions index in August fell to 94.3 versus expectations of a reading of 95.1. This report falls in line with reports coming out of the world’s major economies that show generally slowing global economic growth.
The key “outside markets” today see Nymex crude oil prices weaker and trading around $53.75 a barrel. The U.S. dollar index is solidly higher today.
The precious metal can remain above $1,500 an ounce, but some headwinds are coming in, especially when it comes to weak Asia demand.
Increasingly got a stronger headwind of weak Asian demand from both India and China. In order to maintain prices and go higher, there needs to be strong continued interest from Western investors. Given the global macro uncertainty, that could continue to be the case. But, in the short-term, we saw very dramatic fall in bond yields and there is clearly scope for some of that move to unwind and that could put some downward pressure on gold.