Gold trades with a soft tone in European morning as USD strengthens. Price will continue moving around 1120-1130 level ahead of US employment report. The yellow metal is likely to be strongly impacted by USD's movement which in turns is influenced by US data. Upside surprise in payrolls data will be negative for gold, at least in the near-term, as this will increase speculations for an earlier Fed rate hike. However, gold price will remain supported by Fed officials' reiteration to keep monetary policy accommodative.
While in consolidation, platinum continues hovering at elevated level. Apart from robust auto data, price remains strong as the first US platinum ETF by ETF Securities will start trading today and is expected to attract huge investments. Similar to platinum, palladium's trading momentum remains intact despite mild retreat from 18-month high. The first-ever US palladium ETF will also be launched today.
Crude oil falls for the second day but a temporary support is seen at 82. Energy prices rallied strongly in December as declines in oil inventory raised hopes for demand recovery. Moreover, abnormally cold weather in the US probably raised distillate demand.
Weather futures by CME suggest that the market anticipate temperature in January will be over 10% colder than 20-year average and that cold weather will continue in February. This may help support oil prices.
Stock markets generally rise higher ahead of the employment report. In Asia, the MSCI Asia Pacific Index added +0.6% as driven by rally in Japanese shares. The Nikkei 225 Stock Average gained +1.1% on speculations that depreciation in yen will help boost the country's export-heavy economy. Automakers were well-bided with Toyota, Isuzu and Mazda gaining +2.9%, +9.1% and +7.4% respectively.
In Europe, indices opened higher by then pared gains after release of disappointing economic data in the Eurozone. The unemployment rate rose to +10% in November (consensus: 9.9%) while October's reading was revised up to 9.9%. Germany's DAX gains +0.3% to 6037 and France's CAC 40 rises +0.6% to 4048. In the UK, the FTSE Index initially surged to as high as 5549 before retreating to 5529, up +0.05%.
GOLD REPORT:
Gold's recovery stalled after hitting 38.2% retracement of 1227.5 to 1075.2 at 1133.4 and with 4 hours MACD crossed below signal line, intraday bias is turned neutral. With 1115.9 minor support intact, another rise cannot be ruled out and above 1141 will target 61.8% retracement at 1169.3 next. On the downside, however, break of 1115.9 minor support will argue that recovery from 1075.2 might have completed and will flip intraday bias back to the downside for retesting this support.
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER REPORT
With 4 hours MACD crossed below signal line, an intraday top is in place and bias remains neutral. On the downside, break of 17.50 minor support will suggest that rebound from 16.765 has completed ahead of 61.8% retracement of 19.50 to 16.765 at 18.455 as expected. In such case, intraday bias will be flipped back to the downside for retesting 16.765 support first. However, sustained trading above 18.455 will invalidate this view and argue that whole fall from 19.50 has completed. Stronger rally could then be seen to retest this resistance.
In the bigger picture, rise from 12.435 should have completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. Break of 16.12 support will confirm this case and should target lower trend line support at 13.88 level. This will also be the another signal that whole medium term rise from 8.4 has finished too. Sustained break of the lower trend line support will confirm this medium term bearish case and bring further fall towards 8.4 low.
Also, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.
CRUDE OIL REPORT:
Crude oil is losing some upside moment with 4 hours MACD back below signal line again. Nevertheless, another rise is still in favor with 80.79 support intact and current rise from 68.59 could extend to upper trend line resistance at 87/88 level. On the downside, break of 80.79 will argue that a short term top might be formed with bearish divergence condition in 4 hours MACD and deeper pull back could be seen.
In the bigger picture, the break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Nevertheless, there is no change in the view that it's a correction to fall fro 147.27. Hence, we'd continue to look for reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. However, break of 68.59 support is still needed to confirm that rise from 33.2 has completed. Otherwise, outlook will be neutral at worst even in case of deep pull back.
DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
While in consolidation, platinum continues hovering at elevated level. Apart from robust auto data, price remains strong as the first US platinum ETF by ETF Securities will start trading today and is expected to attract huge investments. Similar to platinum, palladium's trading momentum remains intact despite mild retreat from 18-month high. The first-ever US palladium ETF will also be launched today.
Crude oil falls for the second day but a temporary support is seen at 82. Energy prices rallied strongly in December as declines in oil inventory raised hopes for demand recovery. Moreover, abnormally cold weather in the US probably raised distillate demand.
Weather futures by CME suggest that the market anticipate temperature in January will be over 10% colder than 20-year average and that cold weather will continue in February. This may help support oil prices.
Stock markets generally rise higher ahead of the employment report. In Asia, the MSCI Asia Pacific Index added +0.6% as driven by rally in Japanese shares. The Nikkei 225 Stock Average gained +1.1% on speculations that depreciation in yen will help boost the country's export-heavy economy. Automakers were well-bided with Toyota, Isuzu and Mazda gaining +2.9%, +9.1% and +7.4% respectively.
In Europe, indices opened higher by then pared gains after release of disappointing economic data in the Eurozone. The unemployment rate rose to +10% in November (consensus: 9.9%) while October's reading was revised up to 9.9%. Germany's DAX gains +0.3% to 6037 and France's CAC 40 rises +0.6% to 4048. In the UK, the FTSE Index initially surged to as high as 5549 before retreating to 5529, up +0.05%.
GOLD REPORT:
Gold's recovery stalled after hitting 38.2% retracement of 1227.5 to 1075.2 at 1133.4 and with 4 hours MACD crossed below signal line, intraday bias is turned neutral. With 1115.9 minor support intact, another rise cannot be ruled out and above 1141 will target 61.8% retracement at 1169.3 next. On the downside, however, break of 1115.9 minor support will argue that recovery from 1075.2 might have completed and will flip intraday bias back to the downside for retesting this support.
In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER REPORT
With 4 hours MACD crossed below signal line, an intraday top is in place and bias remains neutral. On the downside, break of 17.50 minor support will suggest that rebound from 16.765 has completed ahead of 61.8% retracement of 19.50 to 16.765 at 18.455 as expected. In such case, intraday bias will be flipped back to the downside for retesting 16.765 support first. However, sustained trading above 18.455 will invalidate this view and argue that whole fall from 19.50 has completed. Stronger rally could then be seen to retest this resistance.
In the bigger picture, rise from 12.435 should have completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. Break of 16.12 support will confirm this case and should target lower trend line support at 13.88 level. This will also be the another signal that whole medium term rise from 8.4 has finished too. Sustained break of the lower trend line support will confirm this medium term bearish case and bring further fall towards 8.4 low.
Also, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.
CRUDE OIL REPORT:
Crude oil is losing some upside moment with 4 hours MACD back below signal line again. Nevertheless, another rise is still in favor with 80.79 support intact and current rise from 68.59 could extend to upper trend line resistance at 87/88 level. On the downside, break of 80.79 will argue that a short term top might be formed with bearish divergence condition in 4 hours MACD and deeper pull back could be seen.
In the bigger picture, the break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Nevertheless, there is no change in the view that it's a correction to fall fro 147.27. Hence, we'd continue to look for reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. However, break of 68.59 support is still needed to confirm that rise from 33.2 has completed. Otherwise, outlook will be neutral at worst even in case of deep pull back.
DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
