GOLDPETAL1! trade ideas
Gold's #1 FoeThe precious metal faces one of its most prominent headwinds, rising real yields. As a non-yielding asset, Gold must compete with the risk-free return that U.S. Treasuries provide.
Furthermore, the difference between Treasury rates and the inflation rate provides what is known as the Real Yield. According to the St. Louis Fed Economic Research, Real Yields turned positive in October 2021 and peaked in March 2023, Gold struggled this February as Real Yields surged into that peak. After slipping into June, Real Yields have risen sharply, bringing renewed pressure on the precious metal.
It is no coincidence the U.S. government reached a deal in June to suspend the debt limit until 2025. This enabled the government to issue new debt via Treasuries.
The government's third-quarter deficit was expected to be $750 billion, but earlier this month, they revised it to be $1 trillion. The result is more Treasury supply, driving down treasury prices, which can be seen through CME Group Treasury futures, and thus underpinning a continued rise in yields.
CPI, a closely watched inflation gauge, for July recently came in at 3.2% y/y, nearly a two-thirds drop from last summer's peak. However, a steady flow of Treasury issuance has lifted yields, thus reinvigorating Gold's foe, the Real Yield.
As we move into autumn, we must ask ourselves, has the market discounted a frivolous U.S. government?
If so, when coupled with the trend lower in inflation, this sets the stage for Gold's time to shine.
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 on CME Group data plans available that suit your trading needs www.tradingview.com
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.
Bobby's homework assignment8.30.23 This video Is about gold. I bought gold yesterday... and I bought it where I would normally exit the market if I were a buyer at a lower price. I broke my rules... and to be honest I really don't like doing that... because my rules protect me and they keep me out of trouble and they help preserve my reward on a trade that I have taken. We looked at what Defines a pivot as structure. We will definitely come back to this video when gold produces somewhere price bars in the next few days.
GOLD (GC1!) Mid Term Bias UpdateGOLD has now reached the 0.382 fib point of the most recent weekly wave.
As I have mentioned on my previous weekly analysis, this was the first zone to start looking for shorts.
For now, wait to see how price reacts in this area.
GOLD (GC1!) Intraday trade - LONGThis appears to be a good area to long towards our weekly target of the 0.382 - of the weekly wave down.
On larger time-frames such - in this case, the weekly - GOLD has formed a very substantial head and shoulders pattern.
We have have not yet reached our minimum shorting zone, so for now, continue to look for LONG opportunities.
Keep in mind, it is likely that the upcoming JOLTS numbers will continue to show a slowing in the US market, which will give GOLD some strength short term.
Enter as a BREAKOUT trade.
Gold Keeps Trading Sideways or Bullish way!!! Here's Why?The price has already broken the cup pattern. now, the price is at the PRZ point, which can be good, If of course,Price keep the PRZ zone. If the price can break the 2080 point in the midterm, the price will reach the target much more easily.
➡️ Note if the PRZ is broken downwards with the strength of Bearish candles or , this analysis of ours will be failed.
✅Thank you, and for more ideas, hit ❤️Like❤️ and 🌟Follow🌟!
Mcx gold chart analysisMcx gold chart analysis.
Traders, who understand this chart, will make huge money in upcoming session/quarter.
Who already draw this, can easily relate with this.
Gold retracement can go up here, $1936-1947 are breaking zones, for both side. If price closed above go for buy, if not short huge.
GOLD NEXT WEEK LEVELSGold will face resistance at upper channel line and first & second support zones 1910/25, 1875/90
Gold-Lower BoundCurrent Gold short zone 1942-1945. look for confirmation to down side with the break and retest of current trendline. Falling RSI can be seen as another conformation of price decreasing.
Look for pull back to the 1.27 fib level on 30 min time frame. Possible sideways range between 1925-1940 for consolidation as price are far away from higher time frame moving averages.
Short 1942-1945
TP 1927
SL 1956
Gold Futures Monthly -- Fed Hawk, Pivot and DoveAs you can see, a Hawkish Fed does not necessarily have a momentous impact on gold. From 12/16 to 12/18, the Fed went on a hiking spree and gold fluctuated at a level between 1300 and 1100 over the period. So there was a base set over a two year period. When the Fed pivoted and halted the interest hikes, gold jumped and then leveled for a while until rates were reduced by the Fed from 7/19 into 3/20. From there gold jumped.
Despite the recent hawkish Fed going back to early 2022, gold has hovered in a flag since April 2023 above the 1900 level (with only minor dips).
Whether the hawk talk continues or not, I expect a seasonal push in gold to 2200 range by January, 2024.
CAN BRICS Gold Standard Threat USD in Nearest Months?Last month there were several claims, and rumors, that BRICS will back its united future currency by gold.
The return of gold as money has been heavily discussed by gold bugs for about the last 10 years. Below I provided their general thoughts:
The gold bugs nailed that China and Russia have significantly boosted their gold reserves.
The countries conduct independent geopolitical policy that contradicts the West.
Dollar days are over. The White House sanction policy which escalated last 2 years combined with permanent US debt growth and dollar depreciation make it impossible to use USD in global trade, global investments, etc. The world needs to return to gold, because the last 50 years after Nixon suspended USD convertibility to gold, have shown that fiat is the pyramid of growing debt and continuous inflation.
In other words, claims about the BRICS gold standard perfectly fit these gold bugs' dreams.
During the year there were proposals for BRICS membership, from Algeria, Saudi Arabia, the UAE, and many other developing countries from different regions.
It is hilarious for me, that the acronym BRICS was coined by the British economist Jim O'Neill from Goldman Sachs. Today countries that oppose the West or conduct independent from the West policy, use the English acronym BRICS to describe themselves. West created BRICS (not only the acronym, but investments, favorable trade laws, etc.), and BRICS opposes the West.
I see five internal pillars to establish gold-backed supranational currency. You need
a united bank that will manage the currency
gold reserves,i.e. the funds for the currency
economic strength, that usually measured by GDP to compete with fiat and unfriendly regulations from non-block countries
established robust relations in international trade between members or potential members
supranational and national legislation that will regulate the currency without undermining national currencies, FX markets, monetary policy, etc.
Several years ago BRICS established the supranational bank New Development Bank (the NDB). Possibly, it may become the alliance central bank and the issuer of gold-backed currency. Its total equity in the 1Q of 2023 was equal to 11.17 billion USD. It is big enough for private institutions from emerging markets, but not enough if you pretend to alternate the American dollar. The bank applies USD as its reporting currency. It makes sense if you do not oppose the dollar hegemony. According to the bank investor fact sheet, the bank is a bond market participant with high credit ratings, that regularly issues bonds in USD (again, hated dollar) and currencies of the members (CNY, RUB, ZAR bond programmes).
The bank has adopted the Contingent Reserve Arrangement (CRA). It is a framework to provide liquidity during financial stress. To my knowledge, it wasn't used in February 2022- March 2023 when the Russian financial system and especially the ruble were under enormous pressure . Russia closed its markets and imposed currency control measures to cool off unfavorable trends. It highlights how uncoordinated and unhelpful BRICS is. One excuse may exist if other members offered Russia to use the CRA and it refused.
You can say, that the NDB can easily increase its 11.17 billion USD equity using the gold reserves of the union. Let's move to gold holdings.
The first pane, under the continuous gold futures price, shows BRICS gold reserves performance according to the World Gold Council (WGC). At the end of Q1 2023 the combined reserves exceed 5444 (5444.53) tonnes or 175.045 million oz. It is noticeably higher than all world gold demand, which was estimated by the WGC at 4742 tonnes in 2022.
London Gold fix was 1963 USD/oz on July 21. Applying the price, the gold reserves of BRICS surpass 343.6 billion USD .
The major share is provided by Russia and China. Russia held 2326 tonnes (42.72% of the BRICS reserves), and China possessed 2068 tonnes or 37.98% of reserves. It was followed by India with 794.6 tonnes or 14.5%. Brazil and South Africa held almost the same amount of yellow shinning metal: 129.6 tonnes (2.38%), and 125 tonnes (2.3%) respectively.
It is the first striking difference that members have an uneven metal distribution that can undermine the future of a possible united monetary union . However, not necessarily countries would invest all their gold to create the gold-backed currency.
Another drastic difference is in their GDP size . The merged GDP of the block was about 25.91 trillion USD in 2022 . China had 17.8 trillion USD, significantly exceeding others or accounting for 68.7% of the alliance. While it held 37.98% of all group gold reserves.
The next was India with 3.3 trillion USD providing 12.74% to the union's GDP. Its GDP share is close to its gold reserves share of 14.5%.
The third was Russia with 8.6% GDP share or 2.24 trillion USD. [ Important to note that Russian GDP dollar estimation was hampered by the overpriced ruble in 2022. It was caused by Western sanctions on Russian imports, while Russia was receiving plenty of dollars for its commodities. That finally ballooned the country's current account surplus to the historical highs being a magical pill of ruble strength. ]. It is not the big GDP share, while the country's gold reserves proportion was 47.7%.
Russia was followed by Brazil with a GDP equal to 1.92 trillion USD contributing 7.4% to the merged GDP. Brazil's GDP stake exceeded its metal reserves.
The South African GDP was 0.4 billion USD providing 1.54% of GDP. The GDP share is slightly below the country's metal stake in BRICS.
The economic strength of members does not equal countries' gold reserve s. Only India and South Africa had close estimations of share in GDP and gold inventory.
The inclusion of export data in analysis can't show all the depth of international trade between the members, but quantitative figures will uncover the trade patterns. Not sure that export data on the 4th pane has equal periodicity, but I have to apply that all 5 countries have the same monthly periodicity. The summarized monthly exports are about 393 billion USD. The figures have some seasonality, more volatile than annual GDP and quarterly gold funds data, but their volatility will not wreck the analysis and the general situation.
China is the leader with 72.5% in the group exports.
Russia is the second with 9.1%.
India is sat next to it with 8.39%.
Brazil is close too, with 7.63%.
As in the previous rankings, the last one is the South African Republic with a 2.3% export share in the related group.
There are discrepancies between export share, GDP, and gold funds among the block. Again the South Africa figures of exports close to its gold reserves and GDP contribution, while for others they do not match.
Among the total export figures, we should take into account with whom the countries trade and what they trade. The primary buyers of Chinese exports are the USA, Japan, South Korea, and the EU or the West which use USD and partly EUR in their international contracts. The main export partner of Russia, Brazil, and South Africa is China . But the main export partner of India is the USA.
Nothing is surprising here, the predominant goods in Brazilian, Russian, and South African exports are commodities. The main world factory of consumer and industrial goods is China which buys commodities and consumes commodities to make the final goods. India is in the middle, it exports some goods, like pharmaceutical products, but the majority of the exports are commodities or refined commodities (like petroleum).
Worth noting that has happened after the West imposed sanctions on Russia. Russia has decreased its dependency on the West and extraordinarily increased market share in non-West countries, like India, Turkey, and China. They say Russia supplies its commodities with heavy discounts.
What currency do Russia and its non-western partners use? According to Reuters' article published on May 4, 2023, between Russia and India most of the transactions happened in the American dollar , other parts were made in Indian rupees, the UAE dirham (AED). Because Russia couldn't spend rupees, the two countries suspended their rupees trade. Russia preferred CNY and part of transactions were routed via China.
It says a lot about BRICS partners and their bilateral trade, transactions, and payment currencies. Even sanctioned Russia was ready to receive the dollar (thanks to a few exemptions provided for USD payments to Russian commodities), to receive AED, which is pegged to USD (quasi-dollar) and Chinese yuan. China is the main importer of Russia, so it is comfortable for Russia to receive yuan for its exported commodities and spend it on its imports. Why single supranational currency can be created after all the mentioned facts?
According to the Bank of Russia statistics, the yuan share in Russian exports payment was about 25% in May 2023, compared with the combined USD and EUR share of about 33%. About 30% of Russian imports were paid in Chinese yuan compared with 33%-34% of payments in USD and EUR.
Even being under sanctions and having the necessity to go away from the USD and EUR, Russia still significantly uses them. Having 2326 tonnes of gold and being #1 in the gold reserves ranking, Russia hasn't used it in its international trade. There are no official statistics that can prove using gold in Russian international trade. Why not use gold? Do the Western sanctions on Russian gold transactions undermine the Russian ability to use its gold in foreign trade? If the answer is yes, then for me it is hard to believe that not only gold-backed currency can be established, but also play an important role in the international trade between members of BRICS. It can be the BICS gold standard. Yuan-gold back standard, anything without Russia.
International trade is also about the trade of goods and services and international investments. The topics are out of the scope of my analysis. Of note, the majority of international reserves of these countries are invested in USD-denominated assets, predominantly bonds . I believe the most diverse is Russia which has invested its reserves in CNY, AUD, CAD, CHF, and GBP. All Russian reserves, except CNY-denominated, are under sanctions now. Will gold-backed BRICS currency have the assets nominated in the gold-backed units allowing economic agents to earn interest? At the minimum, it should provide opportunities to store value, be volatile as the American dollar or less, and be liquid to be exchanged in fiat and goods.
Finalizing 1,2,3,4, I want to add, that only current members were analyzed. If new members join, it will change amounts, countries share and their positions in gold funds, GDP, and international trade, and likely will demand to increase the NDB equity letting new members in.
I can imagine that the countries can adopt supranational and national legislation to establish gold-backed currency. But I can't imagine how many problems it will create. How it will work with their national currencies? How it will affect taxation? If it is backed by gold, then its currency rate will mimic the gold price. Can they issue debt in the new gold-backed currency? It will be like a creation of the European Union and its Eurozone with its fiat Euro. It can't work without a lot of frameworks and treaties. As Europe shows, treaties are not followed by its member states. If BRICS doesn't have aims to use their unborn currency in trade between private companies, and individuals, it will be like the SDR of the IMF. If exporter/importer (no matter, whether an individual or a company) can't use the currency, it will not outshine dollar transactions. Just a new measure of calculation of debt and assets for its members.
The internal factors were analyzed. There is one important external one. To protect the new currency, and develop its popularity to substitute the dollar you need to build trust in the currency among others.
On the bottom of the superchart, corruption ranks show. The least corrupt has first place among all other countries. The ranking compares countries with each other. You can argue that it is biased data. Yes, it can be. But I believe, it shows the general scene. China the best member-state, ranks 65th, South Africa is on 72nd place, India on the 85th, Brazil on 94th and Russia takes 137th place.
With these figures, I doubt that the supposed currency can be confidently used by the private sector and will be trusted by the private sector and non-member states.
All in all, there are a lot of contradictions in the creation of gold-backed currency, the USD substitution. If a country wants to use gold right now in international trade, it can do it, if its counterparty agrees, and there is no need to create the supranational monetary surrogate that is backed by gold. The current situation shows that countries are more likely to continue using USD, a national currency in international trade than create a confident and useful gold-backed currency.
Creation of a single currency can take years, countries will need time to adopt their laws and monetary policy, and business habits to use this currency. It may be a smooth long-term process to create the gold-backed currency. Even the situation with Russia, when the country needs to stop using 'poisonous' USD, has shown their economic agents still pay and receive USD.
In my opinion, that it is more probable, they would create a yuan-backed CBDC, than the BRICS gold-backed single monetary unit that will threaten the dollar.
Favorable rumors and estimations from experts could buoy gold prices until the end of the BRICS summit (August 24, 2023).
On the technical side, gold seems weak to breakout the 2100 USD/oz resistance in the nearest month. Presumably, it would float between 1900 and 2100 USD/oz.
Gold Wyckoff Re-DistributionGold on a monthly level using Wyckoff Re-Distribution.
Target lower buying levels before making ATH rally.
Time line post 2024 for ATH rally heading into 2026 possibly.
Bobby's homework assignment8.24.23 In this video I reviewed some aspects of the ES and I also looked at the oil market. most of my discussion Is about reading the price action and projecting where markets can go before they go there. What you need to be careful about Is that this type of analysis Has you think like a scalper... which is okay because it improves your analytic analysis... but Trading as a swing Trader Is probably going to be a lot more palatable unless stressful for more people. From my point of view I'm trying to put it out there how I look at the market and project the market each video... and generally that is good for me because I read the market better as a result.... but if I'm not making videos...It takes very little time to make an analysis and to decide if it's worthy enough to really take seriously or not.
GOLD (GC1!) Midterm update - Areas of interestI have annotated on the chart what my thoughts are.
For more information, please refer to my previous weekly bias post.
Also key notes today:
US durable goods was lower than expected, and generally the data was not good for the dollar. Ignore the short term noise, we can expect gold to see some strength here, however short lived it may be.
You may want to long from the neutral pivot, but personally I will be waiting to short at the appropriate zone.
Remember, before entering any positions make sure the price has actually REJECTED the area first. Do not allow FOMO to influence your trades.
GOLD (GC1!) Market Update Please refer back to my weekly bias for GOLD.
We are now approaching the two key zones I discussed a few days ago.
Remember, we have Jacksons hole today, which will climax tomorrow with Powell speaking.
I will post some lower timeframe ideas closer to these zones.
