Central
Something's stirring in the gold marketA break above 1180 could signal the end of the secular bear market within the larger bull market of gold, as for the first time gold made a higher high price since it fell from a peak of 1900.
Current price action is considerately overbought, but every dip was bought up given the fear and global macro.
Next few days we might potentially see Dollar correcting by at least 3% and this will be the catalyst of a 'higher-high' in Gold vs USD ratio.
Yes I'm aware, analysis such as Harry Dent is calling for $700 gold. I'm unconvinced. Deflation is the trend in the global economy and gold is an inflation hedge. So why would gold go up when the global economy is deflating?
Link: economyandmarkets.com
Simple, central banks all around the world are stuck.
In the midst of a market crash and interest rate were still at 0%, not even QE is having any significant impact in countries like Japan and Europe. Markets are in untested water! They have no other gunpowder to stimulate the economy right now.
Historically gold rallies in times of a rising interest rate since it is an inflationary hedge, and interest rate rises because the economy is heating up.
Market expectations are changing. From a strong dollar as a result of Janet Yellen not wanting to lose her confidence by rising rates, to macro fears about the global economy. People will be expecting rates to be dropped, or even negative in the following months.
What if the interest rate were to be negative if Central Banks run out of options?
What if more QE was done?
Why would anyone still want to keep their money in insolvent banks and be charged at a monthly fee?
Gold isn't just a commodity, it is also a form of money beyond the control of any entity like Bitcoin. The correlation impact of the economy to gold will be pretty insignificant, considering the bigger picture as a hedge against a risk.
Some other factors includes only 73,000 ounce of gold remaining in the vaults of COMEX as of 2nd Feb 2016. 542 ounce of paper gold owner backed by just 1 ounce of physical gold.
What if these people starts asking for their gold back with the paper contracts they bought? You can expect a default ahead in the exchange just like the infamous bitcoin exchange, MtGox.
It is simply an accident waiting to happen!
Mike Maloney: www.youtube.com
FED POSSIBLE SCENARIOS FOR EURUSD (Dec Meeting)Hi All!
As I did back in August with the september meeting, I have decided to create a possibility of different Scenarios for the EURUSD pair for the month of December.
I have outlined 3 scenarios based on the price range seen and recheable so far this year, this would give you a good idea of where to buy, sell or hold positions if you are thinking about trading in Dec.
As ALWAYS! please be careful what you do, this is not for beginners but Im sure it would be a great time to try a few things with demo money as well.
In a nutshell...
IF THE FED RAISE THE RATES - the question here is not will you?, or, will your not? The question is, how much? and for how long? - investors will have to digest the FOMC minutes to make sure they understand how much the FED is prepared to raise and what is it going to be the path of increases. in every outcome there is an idea of what would happen if the rate hike is symbolic, when I say Symbolic I mean so small that is just to show they are taking some action but not enough to make Institutional investors change their mind about the Euro.
IF THE FED HOLDS ON THE RATE HIKE - this would just take us to the same place we are at the moment, important to watch that pivot line (green) because we will continue to pass over and below this line for a long time and only the ECB decisions on the EURO QE purchasing program will decide what moves the pair (and puntualities like Greece, migrant crisis and also fundamental news)
IF THE FED DECIDES TO LOWER THE RATES - this is the less of all outcomes, chances of this is nearly zero and this is why I havent mentioned it on the chart but there still a possibility, if this happens, forget about parity, the Euro and other majors would instantly take over the dollar and we could see levels we havent seen for 2-4 years. Crazy eh? well... we know central banks can be crazy (remember SNB flash crash begining this year)
So... here we go, no only the action of increasing will move the market, but also how much is increased and for how long, watch out for inflation and unemployment as these will be the triggers.
any questions? - ask me here or on my twitter account @SolidSnakeUk89
MACRO VIEW: USDRUB CAN REVERT ON CENTRAL BANK SUPPORTUSDRUB was trending upwards in correlation with WTI Oil descend since beginning of July
Currently Oil fell to its 2015 lows (slightly below them now) while USDRUB was holding 65 level with apparent Central Bank of Russia support.
CBR is selling USD against RUB in attempts to stabilize the national currency.
If the Oil trend down stops at this level, USDRUB is likely to bounce back to 1st st deviation from quarterly (66-day) mean, and then to the mean itself, ceasing its uptrend.
