King obsession for Gold/Copper bullish candle opportunity
Copper giant Codelco has reduced its production for another quarter, although it is expected to improve its data for the second quarter. Yesterday's close in the UK saw all metals mining companies close the market higher ahead of the parliamentary elections which look very much on track for a possible Labour victory. Precious metals and industrial metals mining companies were among the gainers, rising between 4% and 2.4% respectively, in line with gold and copper prices.
If we look at the gold indicators, while in the West they are beginning to show signs of increasing indebtedness in people around 30 years old, associated with the problem of sovereign debt generated by the financing of wars and various subsidies. On the other hand, markets such as China and India have been major buyers of gold in the last decade, and have a problem of excessive accumulation of savings, forcing the Chinese government to promote measures to increase spending and increase indebtedness. The truth is that Asians continue to increase their gold accumulation and this will end up affecting the West sooner or later as the fiat currency is beginning to experience a slump and many Westerners have begun to make a weekly/monthly purchase of gold in entities like Costco (NASDAQ:COST) which hover around 200 million according to data from Wells Fargo bank, and this may be fueling the bonfire of the vanities of the highest quality gold and silver like Kitco which may be the big winners in all of this.
We have on the radar today's holiday in the US where the Non-Farm Payrolls to be released on Friday and according to employment data released yesterday, this data was worse than expected, and this has softened the view of hopes of extending the current monetary policy until September. While the climate of the U.S. jobs report is not expected to change gold too much other than reflecting possible declines, it will not have long-term relevance, because literally:
"EVERYONE IS OBSESSING ABOUT GETTING MORE GOLD."
If hostilities in the Middle East do not escalate it is possible that gold will continue to rise towards $2000-$2300 and silver towards $31-$35.
If we look at the chart a fairly clear bullish flag is forming in both gold and copper. Copper currently has a high of $519.75 which needs to be pierced. Having a target profit taking zone around $580 if the breakout is met. On the other hand the RSI is giving us an overbought signal at 67%. And the price bell marks the current price as a stability zone in a mono bell shaped curve with the $455 with the current strong price zone. This could signal that if the precondition is met, a pullback could be managed as it does not appear to have major strength at this time.
Ion Jauregui – ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
If we look at the gold indicators, while in the West they are beginning to show signs of increasing indebtedness in people around 30 years old, associated with the problem of sovereign debt generated by the financing of wars and various subsidies. On the other hand, markets such as China and India have been major buyers of gold in the last decade, and have a problem of excessive accumulation of savings, forcing the Chinese government to promote measures to increase spending and increase indebtedness. The truth is that Asians continue to increase their gold accumulation and this will end up affecting the West sooner or later as the fiat currency is beginning to experience a slump and many Westerners have begun to make a weekly/monthly purchase of gold in entities like Costco (NASDAQ:COST) which hover around 200 million according to data from Wells Fargo bank, and this may be fueling the bonfire of the vanities of the highest quality gold and silver like Kitco which may be the big winners in all of this.
We have on the radar today's holiday in the US where the Non-Farm Payrolls to be released on Friday and according to employment data released yesterday, this data was worse than expected, and this has softened the view of hopes of extending the current monetary policy until September. While the climate of the U.S. jobs report is not expected to change gold too much other than reflecting possible declines, it will not have long-term relevance, because literally:
"EVERYONE IS OBSESSING ABOUT GETTING MORE GOLD."
If hostilities in the Middle East do not escalate it is possible that gold will continue to rise towards $2000-$2300 and silver towards $31-$35.
If we look at the chart a fairly clear bullish flag is forming in both gold and copper. Copper currently has a high of $519.75 which needs to be pierced. Having a target profit taking zone around $580 if the breakout is met. On the other hand the RSI is giving us an overbought signal at 67%. And the price bell marks the current price as a stability zone in a mono bell shaped curve with the $455 with the current strong price zone. This could signal that if the precondition is met, a pullback could be managed as it does not appear to have major strength at this time.
Ion Jauregui – ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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