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GOLD fell as the trading week kicked offLast week, world gold prices increased by 1.9% even though the Dollar Index, which measures the strength of the USD against a basket of six other major currencies, increased by 0.6%. Gold prices rose after statistics showing softening inflation in the US reinforced the possibility of the Federal Reserve (Fed) cutting interest rates in September. After the CPI data dropped slightly, PPI also fell from 2.3% to 2.2% year-on-year, increasing the appeal of safe-haven assets as a hedge against inflation. The FOMC maintained its inflation forecast for 2024-2025, but the new dot plot shows at least one rate cut this year, applying some much-needed temporary pressure to gold prices. Net gold positions on the COMEX have gradually declined since a peak on May 21, suggesting waning interest among money managers. XAUUSD retreated from the support zone at around $2,300 with weak momentum and consolidated just below the resistance zone at $2,350. If it sustains above $2,325, the price could test $2,350 and the high set on June 7. However, if it trends below the $2,300 support zone, XAUUSD could drop to the support level. next psychological aid. Support: 2,300 – 2,288USD Resistance: 2,325 – 2,335USD 🪙SELL XAUUSD | 2338 - 2336 ⚰️SL: 2342 ⬆️TP1: 2331 ⬆️TP2: 2326 🪙BUY XAUUSD | 2279 - 2281 ⚰️SL: 2275 ⬆️TP1: 2286 ⬆️TP2: 2291
OANDA:XAUUSD
by Xayah_trading
2024-06-24 - priceactiontds - daily update - sp500 e-miniGood Evening and I hope you are well. sp500 e-mini futures comment: Expanding triangle on the 1h tf and that’s a form of a trading range. Big up, big down, big confusion, more sideways likely. 5530 is the most important price currently at about the middle of the range. Did the bears do enough damage today to expect follow through tomorrow? I don’t think so. They barely made another lower low. Selling down here is a bad trade. current market cycle: Max bullishness & peak bubble territory. Literally the peakiest of the peaks. Mother of all bubbles. Will end over the next weeks. —unchanged key levels: 5500 - 5600 bull case: Bulls tried and failed at 5558 which qualifies as a decent lower high. Bulls need to stop the selling above 5500 or risk trading back down to the daily ema around 5460. They still see this as a minor pullback in the huge bull trend. Their problem is, that bears printed 3 consecutive bear bars now and broke the first bull trend line. It’s a bad buy here unless they get strong momentum going tomorrow. Invalidation is below 5500. bear case: Bears doing good and trapping overly eager bulls in buying everything but the selling is not strong enough to question another retest of the highs. Until bears trade below the daily ema, they will be quick to exit shorts that lose momentum. Their next target is 5500 and then 5470, where we should hit the daily ema. If they also somehow manage to get below that level, the bull trend line will be tested next - around 5420ish. Invalidation is above 5560. short term: Neutral between 5500 - 5540, bullish above and bearish below medium-long term: Bearish. We will see 5000 over the next weeks again and 4600 over the next 12 months. Will update this time and price wise over the weekend but I expect to at least see 5000 over the next months in 2024. —updated weeks to months. current swing trade: None trade of the day: Strong buying on bar 36 which was a decent buy since bears could not get below 5525. Triangle bar 37-47 and bar 48 was a good entry bar for shorts. Strong break below the triangle with follow through. Could have closed shorts on bar 56/57 because 4 consecutive bull bars but they had big tails above. If you held, could have been 100+ points.
CME_MINI:MES1!
by priceactiontds
MarketBreakdown | Dollar Index, Silver, EURCAD, WTI Oil Here are the updates & outlook for multiple instruments in my watch list. 1️⃣ Dollar Index #DXY daily time frame 💵 Dollar Index nicely respected a key daily horizontal resistance. We see a nice bearish reaction to that today. Because of the absence of important fundamentals, I think that DXY may keep staying under a bearish pressure. 2️⃣ Silver #XAGUSD daily time frame 🪙 The price action on Silver contracts. The market is currently stuck between 2 trend lines, forming a classic symmetrical triangle formation. Before the release of the news, the market will most likely stay within the triangle, respecting its upper and lower boundary. US fundamentals this week can be a catalyst for a breakout. The side of the breakout will indicate you the future direction of the market. 3️⃣ #EURCAD daily time frame 🇪🇺🇨🇦 The market is approaching a significant confluence zone based on a recently broken horizontal support and a trend line. The broken structures compose a supply zone from where we may see a bearish movement. Patiently analyze the reaction of the price to that on lower time frames and look for a confirmation to sell. 4️⃣ #WTI CRUDE OIL 🛢️ The market is currently stuck between 2 horizontal structures within a narrow range. I will wait for a breakout of one of the structures to confirm where the market will go next. ❤️Please, support my work with like, thank you!❤️
TVC:DXYShort
by VasilyTrader
1
BTC can tap 7,000 to 10,000 and this is WHYDXY is completing a major bearish retest currently - on the minute time frames. This breakdown is a multi-month trendline, and what the DXY / Bitcoin correlation would indicate, is that we can expect an extended bull run of 1-2 years. This rise in bitcoin has been a straight shot up on the high time frames. What this tells me is that this move is a bearish retest. Identifying this trendline on BTC chart - price is underneath the breakdown line at 63,850. There are many large open order gaps on the BTC chart below the current price. These open gaps are filled with long position stop losses. These are leveraged sell orders. It is possible that Bitcoin will drop to hit 8,000 in a very short amount of time. 1. We are underneath the breakdown line 2. There are enough stop loss orders (leveraged sells) to create an automatic chain reaction of a drop to that low level. The lack of retracement on BTC over the last 1.5 years shows intention to leave these order blocks intact so that speed of this move is generated. 3. DXY indicates a justification for this move to occur as reason to drop a bearish pattern over a long term period isn’t showing. I encourage you to stay open minded to this possibility. I logically can see this happening very quickly.
Short
by DickDandy
#202426 - priceactiontds - weekly update - sp500 e-mini futuresGood Day and I hope you are well. sp500 e-mini futures Quote from last week: bear case: What do the bears have going for them? Nothing and if anything, pure speculation and low probability stuff. The chart is showing multiple wedges, we are clearly in multiple third pushes up (W5) and volume is drying up. Once the institutions begin taking profits on the magnificent 7, we will see big moves down to end the trend and enter a trading range. The bull trend line around 5300 will be hit in the next 2-4 weeks and afterwards I think we will form a lower high before we will be on our way to 5000 again. As of now I think bears want to see a big climactic bull bar to 5600 before they begin shorting again. comment: Market did exactly what I wrote in my last bear case sentence. Climactic bull bar on Monday with some follow through Tuesday and Wednesday to almost 5600 and then a pullback. Bulls touched the big upper bull trend line which began on 2023-02-02. Bears broke below the very tight bull channel but just so slightly and with tails below the daily bars. I expect the market to retest the highs again before another second leg down, which could then form into a decent pullback, like the one we had in April. Market sentiment is max bullishness from everyone everywhere and the posts about “this time it’s different” have become common. It’s the fomo phase where your Mother asks if she should buy some Nvidia stocks. current market cycle: End of the bull trend is near. Will soon see a bigger pullback. key levels: 5400 - 5600 bull case: Bulls will probably retest the highs or even make a higher high soon. First pullbacks / low 1, is a buy signal in a bull trend. After that retest, I - again, have nothing for the bulls. We are at the peak of this bubble imo and that’s where you get cautious and not even more bullish. Nvidia will touch 100 over the next weeks, if not days. Invalidation is below 5400. bear case: The profit taking has begun imo. All bullish targets are met and we are trading at multiple upper resistance lines and prices. The daily ema is 80 points away and will get tested soon. Bears see the 3 pushes up from end of May and now want a decent pullback to the bull trend line around 5400, wich is also the breakout retest. Invalidation is above 5620. outlook last week: No interest in buying here unless it’s a momentum scalp. I will look for weakness and a trade back to a test of the daily 20ema which is around 5400. Bulls are still heavily favored in terms of probability. → Last Sunday we traded 5502 and now we are at 5534. New ath was 5587, so my outlook was good for 85 points. You. Are. Most. Welcome. Compare that to Newsletters who cost 130$ per month and include planetary constellations in their market analysis. short term: Don’t get too bearish too soon. You never want to try to pick a top or a bottom. Let the big bois with endless money do that for you and follow along. Expecting another push for retest of the highs, followed by another leg down, as painted in my chart. medium-long term: Bull trend is in the last legs and this will soon pull back much further and form a big trading range. I gave 5600 months ago and we are close enough to it or will touch it next week. Afterwards the money is made on the downside. 5300 over the next 1-2 weeks, followed by 5000 over the summer. current swing trade: None but will enter new shorts next week. Chart update: This is my best guess on how the next 3-9 months will play out. Two-legged correction down to 5000 over the next 4-8 weeks, followed by a last lower high before the next big bear trend will begin. That’s only price-wise but not time wise. Could get there much faster or much slower.Update: slightly adjusted the bigger two legged correction and added a smaller one.
CME_MINI:MES1!
by priceactiontds
GOLD limits recovery, after CPI, FOMC and Powell's statementOANDA:XAUUSD fell slightly during the Asian session on June 13, following the US CPI data report and the US Federal Reserve's interest rate decision. The 0.236% Fibonacci level limited the recovery momentum of gold price to keep it in the price channel. Data released by the US Bureau of Labor Statistics on Wednesday showed that the US consumer price index (CPI) in May increased 3.3% year-on-year, down from the previous value and the expected value is 3.4%; unchanged from the previous month, 0.1% lower than expected and also lower than the previous value. Values ​​slowed significantly to 0.3%, the lowest level since July 2022. Excluding food and energy costs, May core CPI increased 3.4% over the same period, lower than the expected 3.5% and lower than the previous 3.6%, the lowest level in more than 3 years. year; The increase in May increased from 0.3% in April to 0.2%, weaker than the 0.3% expected. These data coincide with a deceleration in core CPI in April and may represent the early stages of inflation returning to a downward trend. However, Fed policymakers have emphasized that they will need to see price pressures abate for several months before considering lowering interest rates, especially as the latest jobs report sparks a debate. discuss the extent of policy limitations. The report was released hours before the Federal Reserve ended its two-day policy meeting in Washington. The Federal Reserve left its benchmark interest rate unchanged at 5.25%-5.50% for the seventh straight time on Wednesday, in line with market expectations. The Fed's Dotplot chart shows that it is expected that the agency will only cut interest rates once in 2024. Markets expected the Fed to adopt more supportive policies, but US Federal Open Market Committee (FOMC) policymakers reduced plans to cut interest rates three times in March to 2 times after a 2-day meeting. The committee also signaled that it sees longer-term interest rates higher than previously suggested. The new forecast released after a two-day meeting this week showed inflation still on track to return to the Fed's 2% target, allowing for some policy easing later this year. The statement after the meeting said: "Inflation has eased over the past year but remains high." The only significant change is that the new statement continues to say that "more modest progress has been made in recent months toward the FOMC's 2% inflation target." While the previous statement was "lack of further progress" on inflation. On the same day Wednesday, Federal Reserve Chairman Jerome Powell emphasized in a press conference that the Fed was not yet confident in starting to cut interest rates, but also said that no one considered a rate hike an expectation. basic. Powell's statement can be interpreted as keeping interest rates high for longer but ruling out a rate hike. Overall assessment, CPI data has boosted gold prices in the short term, but after the FOMC announcement and Powell's statement reduced the possibility of gold price recovery because the USD became attractive, when the possibility of interest rates The high will last for a longer period of time. The fundamental picture after yesterday's trading day temporarily leans more towards the possibility of creating pressure on gold prices, but traders also need to pay attention to other unexpected impacts from geopolitical news. is still smoldering in many parts of the world. Gold is often supported when geopolitical risks escalate. Analysis of technical prospects for OANDA:XAUUSD On the daily chart, after gold's recovery yesterday, it was capped by key resistance that readers noticed in the previous issue at the $2,340 - $2,345 area, the price range of this level. Fibonacci retracement 0.236%. Gold's fall below $2,324 continues to provide prospects for it to test the $2,300 base and once the $2,300 base is broken below gold will be eligible for a new bearish cycle. with the latter target around $2,286 in the short term, more than the 0.382% Fibonacci level. That said, the original price level of 2,300 USD is also the closest current support worth noting. During the day, the technical outlook for gold prices remains bearish with notable technical levels as follows. Support: 2,300 – 2,286USD Resistance: 2,324 – 2,340USD 🪙SELL XAUUSD | 2338 - 2336 ⚰️SL: 2342 ⬆️TP1: 2331 ⬆️TP2: 2326 🪙BUY XAUUSD | 2279 - 2281 ⚰️SL: 2275 ⬆️TP1: 2286 ⬆️TP2: 2291
OANDA:XAUUSD
by Xayah_trading
1
GOLD MARKET ANALYSIS AND COMMENTARY - [June 17 - June 21]OANDA:XAUUSD maintained a steady recovery before the weekend, but the overall trend remained unclear as US consumer confidence continued to decline and inflation expectations remained high. COMEX gold futures (including electronic trading) closed up 1.31% at $2,348.40/ounce, up 1.01% this week. On Friday, the University of Michigan's preliminary consumer confidence index fell to 65.6 from a revised 69.1 in May. The data was weaker than expected, with expectations for the index at around 72.1. The new divergence between the Fed's interest rate forecast and market expectations could bring some volatility to the gold market in the short term. The latest economic forecast shows the Federal Reserve will cut interest rates once this year, down from three as forecast in March. The Fed's interest rate forecast, also known as the Dotplot, shows the federal funds rate will be above 5.00% by the end of the year. “Inflation has eased over the past year but remains high,” the Fed said in its monetary policy statement. In recent months, inflation has made some progress toward the FOMC's 2% target. Gold should still receive good support as central banks remain solid buyers despite data from the People's Bank of China showing their gold reserves did not increase last month. China is the main driving force behind the increase in gold prices over the past year, and China's gold purchases have only been assessed as temporary and there has not been any move to show that they have "stopped". could also be a move to avoid paying a record high purchase price. Another piece of data worth noting is US Commodity Futures Trading Commission (CFTC) data showing that in the week to June 11, speculative net long positions in COMEX gold futures contracts decreased by 6,200 lots down to 177,549 lots. Economic data next week will be relatively soft, and the technical price trend of gold will receive more attention. The market will get some preliminary and regional manufacturing data as well as some US housing data. Analysis of technical prospects for OANDA:XAUUSD On the daily chart, although gold recovered from the support level of 2,305 - 2,300 USD that readers noticed last week, in general the recovery momentum is still limited and the downtrend has not been broken. The recovery momentum of gold price is limited by the confluence area of ​​the technical point 2,345USD, the 0.236% Fibonacci retracement level, the upper edge of the price channel and the EMA21 moving average. In general, this will be the area where the gold price has all the important technical pressures for a technical downtrend. As long as gold remains below the EMA21 and within the price channel, the technical outlook for gold prices remains bearish, while if gold breaks below $2,324 it will have room for more downside with the following target level That's about 2,305 - 2,300USD in the short term. A new bearish cycle is expected to be ushered in once gold breaks below the original price of $2,300, and the subsequent short-term target level is $2,286 more than the 0.382% Fibonacci retracement level. Next week, the technical outlook for gold prices remains bearish with the following notable technical levels. Support: 2,324 – 2,305 – 2,300USD Resistance: 2,340 – 2,345USD 📌Short-term trading plan for next week (illustrated chart): In the immediate future, we will consider selling if the price rises to 2365, buying if the price drops to 2260.
OANDA:XAUUSD
by Xayah_trading
2024-06-20 - a daily price action after hour update - sp500Good Evening and I hope you are well. sp500 e-mini futures comment: Interesting trading day to say the least. Globex rallied 27 points to 5587 where it stalled for couple of hours and then before US opened the floodgates were opened. Just strong selling throughout the day with huge bull spikes in between. Bears accomplished a drop of 23 points from open to close, that’s just weak but Globex high to daily low was 62 points. The 15m 20ema was decent today and bulls kept it above the important bull trend line and still far above the daily ema which is at 5450, so 100 points to go. Market has formed a triangle at the lows, which will probably just break out sideways in the Globex and EU session. Since tomorrow is Globex, I have no opinion on where we close the week tbh. Rough guess is at least a close below 5560 but I prefer a close below the bull trend line and below 5500 but that’s low probability. current market cycle: Max bullishness & peak bubble territory. Literally the peakiest of the peaks. Mother of all bubbles. Will end over the next weeks. —unchanged key levels: 5500 - 5600 bull case: Bulls want to stay above 5540 which is my big orange support line. If they fail here, they will most likely also fail at the bull trend line and then 5480/5500 will come fast. Bulls bought every new low today and made money on lower time frames but they could not close above the 15m 20ema. That will be their first target for tomorrow and then above the 1h ema. I expect a pullback tomorrow and depending on how strong it is, another leg down or total melt up to 5600 into opex. Invalidation is below 5520. bear case: Bears had a decent day today. Naturally they want a second leg down, which would bring us to around 5460/5470, which would be my preferred close of this week. Since we are at bigger support, I don’t have much confidence in the bears. Need to see tomorrows price action in EU session. Invalidation is above 5560. short term: Neutral here between 5520 - 5560, bullish above and bearish below medium-long term: Bearish. We will see 5000 over the next weeks again and 4600 over the next 12 months. Will update this time and price wise over the weekend but I expect to at least see 5000 over the next months in 2024. —updated weeks to months. current swing trade: None trade of the day: Shorting every pullback near the 15m ema was decent.
CME_MINI:MES1!
by priceactiontds
GOLD will have unexpected fluctuationsOANDA:XAUUSD delivered immediately increased for the second consecutive trading day, gold price once reached 2,320 USD/ounce. Today (Wednesday), the market will receive the Federal Reserve's interest rate decision and US CPI data, which is expected to explode the market. The latest big news comes from ceasefire negotiations in the Middle East. An Israeli official said Israel had received Hamas's response to the ceasefire proposal through relevant mediators, but believed that Hamas had revised "all the fundamental content" of the proposal and Change the content of this proposal. The proposal outline was previously announced by US President Biden. Israel took this to mean that Hamas had rejected the ceasefire proposal. This news has helped gold attract some safe-haven buying activities, pushing gold prices higher in the context that the Dollar is still stronger. U.S. CPI Data and Federal Reserve Decisions Coming Soon US May CPI data will be released a few hours before the Fed's decision. If inflation stays stable, that could allow the dollar to start to gain traction first. Fed Chairman Jerome Powell will likely be asked about the data at a post-FOMC press conference. On Wednesday, the United States will release the May Consumer Price Index (CPI) report. US monthly CPI growth in May is expected to decline from 0.3% to 0.1%, but monthly core CPI growth is expected to remain steady at 0.3%. Additionally, US annual CPI growth in May is expected to remain unchanged at 3.4%, while core CPI growth is expected to decline from 3.6% to 3.5%. On Thursday, the FOMC will release its interest rate resolution and summary of economic expectations On Thursday, Federal Reserve Chairman Jerome Powell will hold a press conference on monetary policy. Given policymakers' stance of "higher interest rates for longer," the market is almost certain that the FOMC will not act at this week's meeting. So the focus will be on the post-meeting statement and the new interest rate forecast. In March this year, the Fed's Interest Rate Dotplot showed that policymakers predicted that the policy rate would be cut by a total of 75 basis points in 2024. An upward revision is possible. That's because most policymakers say they are in no hurry to start reducing borrowing costs. According to data from the Chicago Mercantile Exchange's "FedWatch" tool, the market expects the probability that the Federal Reserve will cut interest rates by 50 basis points this year is nearly 55%. Today is a very important trading day because it is directional from big data such as CPI and FOMC events, first gold and dollar will be affected by CPI data and then FOMC. If CPI data is better, this will boost the US Dollar but then if the FOMC shows the prospect of a rate cut then this will boost gold prices. A rather complicated trading day with two major events in the geopolitical context showing signs of supporting gold prices. Short comments will be sent to you as data and events are released, hopefully in time with your trading timing. Analysis of technical prospects for OANDA:XAUUSD Gold has recovered to above its original price of 2,300 USD, but it is temporarily limited as it has not yet reached the target level at the technical point of 2,324 USD, as noted by readers in yesterday's publication. However, the overall technical chart still shows a bearish picture with all the conditions from the main trend highlighted by the price channel and the main resistance from the confluence area of ​​the upper edge. price channel, 0.236% Fibonacci retracement level and EMA21. In case gold falls below the original price of 2,300 USD, the recovery cycle has generally ended with the target price reduction then being around 2,286 - 2,272 USD. As long as gold remains within the channel and below the EMA21, the technical outlook for gold prices remains bearish and notable levels are listed below. Support: 2,305 – 2,300 – 2,286USD Resistance: 2,324USD 🪙SELL XAUUSD | 2341 - 2339 ⚰️SL: 2345 ⬆️TP1: 2334 ⬆️TP2: 2329 🪙BUY XAUUSD | 2267 - 2269 ⚰️SL: 2263 ⬆️TP1: 2274 ⬆️TP2: 2279
OANDA:XAUUSD
by Xayah_trading
2
2024-06-18 - a daily price action after hour update - sp500Good Evening and I hope you are well. sp500 e-mini futures comment: Nothing fancy to report here either. Market is in balance and bulls poking at 5560. They want a break above for 5600 and will probably get it soon. Bears shorting the resistance at 5558ish and making money but will be quick to give up, if this trades above 5563/5565. current market cycle: Max bullishness & peak bubble territory. Literally the peakiest of the peaks. Mother of all bubbles. Will end over the next weeks. key levels: 5540 - 5600 bull case: Perfect buying at the 1h 20ema today for another ath 1 point above. Bulls want 5600 next. I leave room for 1 more leg up but that’s it. No more after that. Invalidation is below 5540. bear case: Bears need to stop the higher highs and trade below the 1h 20ema. Until they do that, max bullishness. Don’t make it more complicated. Can literally buy every pullback and make money. Invalidation is above 5565. short term: As bullish as one can be. Ride it up. 1 More leg possible to 5600 but that should be it. medium-long term: Bearish. We will see 5000 over the next weeks again and 4600 over the next 12 months. Will update this time and price wise over the weekend but I expect to at least see 5000 over the next months in 2024. —updated weeks to months. current swing trade: None trade of the day: Buying 5543 or near the 1h ema or literally every 15m bear candle and scalp.
CME_MINI:MES1!Long
by priceactiontds
2024-06-17 - a weekly price action market recap and outlook - nqGood Evening and I hope you are well. Nasdaq. 20000. What else can you say. The AI bubble will be in the history books and Michael Lewis will write a book about the insanity that’s going on. I sincerely hope they bring the exact cast back from the big short. You can quote me on this one. Over the next months, you will read about companies cutting back on spending, especially on AI since it’s expensive af and not bringing in any money. Nvidia will probably be halved somewhere in 2025/2026 so stock should hit around 65ish. Monthly ema is at 60. I looked that up after I wrote the halving part. comment: Let’s review this weekly painting, now that we finally reached 20000. All bullish targets are met, the upper bull channel is broken and I expect this to be a bull trap rather than a breakout above with follow through. If nq trades above 20100, I am obviously wrong. Last two times we reached new highs we sold off for a couple of weeks and this is what I expect this time as well. Market will most likely pull back from here and then retest the ath again before we trade back to the smaller bull channel around 18500 or lower. current market cycle: 20000. Get a tattoo of that. key levels: 18000 - 20000 bull case: Bulls outdid themselves on this one. One for the history books. Can they get higher? Sure but I doubt it. Have nothing for them in this section. Move on. Invalidation is below 19000. bear case: Let’s see if they appear tomorrow. We should see a decent pullback to at least 19500 over the next days, follow by a retest of the ath, which should fail. A bigger two-legged correction should get us down to 18500 over the next days/weeks. On the bigger time frame all my bullish targets are met and all wave series ended between 19000 and 20000. Got nothing for the bulls here. Invalidation is above 20100. short term: Who buy’s this above 20000? Let’s see tomorrow. If they actually do, no idea where it can go. I expect a pullback to 19500 and the daily 20ema. medium-long term: This climactic blow off top was the grand finale of this bull trend. Perfect break above multiple patterns which I expect is a bull trap and we will test the various support lines next before the new bear trend will unfold over the next 3-9 months. current swing trade: Short 20000 until bulls manage to break 20100 or big profits. I will take profits and add to this position along the way. Chart update: This is my best guess on how the next 3-9 months will play out. Gave all the reasons above.
CME_MINI:MNQ1!Short
by priceactiontds
3
GOLD recovers, but technical conditions lean bearish OANDA:XAUUSD recovering to above the price of 2,300 USD as of the time this article was being completed. The previous trading day, gold prices reached their largest decline in 3 and a half years due to data released by China and the United States. Gold prices fell about $83, or 3.5%, last Friday, the biggest one-day drop since November 2020, after a stronger-than-expected US jobs report dampened hopes for a interest rate cut in September, while news that China's central bank is delaying gold purchases caused the market to reduce bets on demand from China, one of the world's biggest gold buyers. . Market focus has shifted to the US consumer inflation report, released on Wednesday, the same day as the Federal Reserve's policy decision. The Fed is not expected to make any changes this week, focusing on comments from Fed Chairman Jerome Powell and changes to policymakers' economic forecasts. On the daily chart, gold is trying to recover above the $2,300 base price and a daily close above this base price would be a positive signal. To confirm, gold should maintain price activity above $2,305, a technical level noted by readers in Sunday's weekly edition. On the other hand, if gold moves below the original price level of 2,300 USD again, it will continue to be under technical pressure with the target level possibly aiming at the price point of 2,272 USD, the location of the 0.382% Fibonacci retracement. Holding above $2,305 would strengthen the case for a recovery with a target then around $2,324, a position that was also brought to the attention of readers in the weekly publication. During the day, the technical trend is still leaning more towards bearish possibilities, positions will be noticed again as follows. Support: 2,300 – 2,286 – 2,272USD Resistance: 2,314 – 2,324USD 🪙SELL XAUUSD | 2341 - 2339 ⚰️SL: 2345 ⬆️TP1: 2334 ⬆️TP2: 2329 🪙BUY XAUUSD | 2267 - 2269 ⚰️SL: 2263 ⬆️TP1: 2274 ⬆️TP2: 2279
OANDA:XAUUSD
by Xayah_trading
Four Factors Driving Gold Prices Relative to Silver2600 years ago, the Anatolian Kingdom of Lydia minted the world’s first gold and silver coins. In doing so, the Lydian King Alyattes and his successor Croesus introduced the world’s first exchange rate: the gold-silver cross. Like any cross rate, the amount of silver that can be purchased with an ounce of gold is driven by both demand and supply-side factors, and the cross rate is anything other than stable. Sadly, we don’t have the time series of the gold-silver ratio dating back to ancient times, but we do have data going back to the launch of gold futures on December 31, 1974. Since the mid-1970s, one ounce of gold bought anywhere from 17 ounces to as many as 123 ounces of silver (Figure 1). Figure 1: The amount of silver an ounce of gold can buy has been highly variable In addition to the impact of monetary policy, which we have covered here, the gold-silver ratio appears to be governed by four other factors: Relative volatility and the silver beta Fabrication demand and technological change Gold’s use as a monetary asset Supply-side dynamics Relative volatility and beta To borrow an expression from the equity markets, silver is the high-beta version of gold. First, silver and gold prices usually have a strong positive correlation. Since 2004 the one-year rolling correlation of their daily price moves has hovered around +0.8 (Figure 2). Second, silver is more volatile than gold. As such, when gold prices move up, silver tends to move up more, thereby lowering the gold-silver price ratio. By contrast, during bear markets, the gold-silver ratio tends to rise. Figure 2: The correlation of gold and silver price changes has hugged +0.8 since 2004. For example, when gold and silver prices peaked in September 2011, one ounce of gold bought fewer than 32 ounces of silver (Figure 3). In the ensuing bear market, the ratio rose to as high as 124 ounces of silver per ounce of gold. The ratio snapped back to 64 in 2020 as gold and silver rallied early in the pandemic. In 2024, as both metals have rallied, silver has outperformed, rising 23% in the first five months of the year compared to 12% for the yellow metal. Figure 3: Positive correlation plus much higher volatility give silver a high beta to gold Fabrication Demand and the Impact of Technological Change What is curious is that while gold and silver have rallied thus far in 2024, gold broke to new record highs of nearly $2,500 per ounce whereas silver prices remain 40% below their twin 1980 and 2011 peaks despite having outperformed gold since 2020 (Figure 4). The reason may lie in technological advances. Figure 4: Gold has hit records in 2024 while silver is still 40% below its 1980 and 2011 record highs Even before the Lydians minted the first gold and silver coins around 600 BCE, both metals had been used to make jewellery: silver since around 2500 BCE and gold since 4500 BCE. Some things don’t change. Even today, the primary use of both metals is to make jewellery. Yet, thus far this century, silver has been buffeted by two sets of technological developments: the digital revolution and the energy transition. Both have impacted the relative gold-silver ratio. In 1999, photography used 267.7 million troy ounces of silver which accounted for 36.6% of that year’s total silver supply. By 2023 photography used only 23.2 million ounces of silver or about 2.3% of 2023’s total supply due to the rise of digital photography. Meanwhile, silver’s use in electronics and batteries grew from 90 million ounces to 227.4 million ounces or from 12.3% to 22.7% of silver’s total annual supply, partially offsetting the decline in traditional photography, which may partially explain why silver has struggled to hit new highs in recent years even as gold has set records. The good news for silver, however, is that it is finding new use in the energy transition. Over the past few years silver has seen strong growth coming from solar panels, which accounted for 20% of 2023 silver demand, up from essentially nothing in 1999 (Figure 5). Solar panels may explain in part why silver has recovered relative to gold since 2020. Figure 5: Battery and solar panel demand have grown as photography demand has shrunk 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 By contrast, gold fabrication demand has shown itself to be immune from recent technological developments and is still overwhelmingly dominated by jewellery demand, with electronics, dental and other uses absorbing just 17% of annual gold mining supply (Figure 6). The differences in silver and gold fabrication demand underscores that gold is considered the purer of the two precious metals. Figure 6: Gold fabrication demand has remained little changed Gold and global monetary policy Indeed, central banks around the world treat gold as money while they largely ignore silver (Figure 7). They hold a combined 36,700 metric tons of gold, the equivalent of 1.2 billion troy ounces or 13 years of global mining output. Moreover, central banks have been net buyers of gold every year since the global financial crisis. Figure 7: Central banks have been net buyers of gold since the global financial crisis Central bank buying of gold since 2009 contrasts sharply with their tendency to be net sellers from 1982 to 2007. Central banks’ accumulation of gold suggests that they want a hard asset to complement their foreign exchange reserves of dollars, euros, yen and other fiat currencies, a view that appears to have been reinforced by on-and-off quantitative easing since 2009 and increased use of financial sanctions. Central bank buying impacts gold prices directly, but only boosts silver prices indirectly via the gold market. The supply side of the equation Central bank gold buying reduces the amount of gold available to the public. Over the past decade, central bank buying has removed the equivalent of 8%-20% of new mining supply from the gold market each year (Figure 8) which may also explain why the gold-silver ratio rose significantly from 2011 to 2020 and why, even today, it remains at 2x its 2011 level. Figure 8: Net of central bank buying, gold supply has stagnated since 2003 Total gold supply net of official purchases has stagnated since 2003. Meanwhile, silver mining supply peaked in 2016 and gold mining supply peaked the next year (Figure 9). The fact that new supply is arriving on the market more slowly than in the past may be bullish for both gold and silver. Figure 9: Gold and silver respond negative to changes in each other’s mining supply. Our econometric analysis shows that gold and silver prices are negatively correlated with changes to one another’s mining supply. A 1% decrease in gold mining supply, on balance, boosted gold prices by 1.9% and silver by 3.0% from 1974 to 2023. A 1% decease in silver mining supply boosted the prices of the metals by 1.3%-1.6% (Figure 10). Secondary supply appears to respond to price rather than drive it. Higher prices incentivize more recycling, but recycled metal doesn’t appear to depress prices as it doesn’t bring any new metal onto the market. Figure 10: Secondary supply responds to price rather than drives it What connects the two markets is jewellery. Because gold is 70x as costlier than silver, when prices rise, demand for gold jewellery falls while silver’s jewellery demand is relatively unresponsive to price because it costs much less. Gold and silver can be seen as a sort of binary star system where the two stars orbit a common center of gravity or barycenter. Gold is the larger, more stable and more influential of the two, but it is by no means immune from silver’s pull. 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 By Erik Norland, Executive Director and Senior Economist, CME Group *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CME_MINI:ES1!Education
by CME_Group
4
AUDUSD continues to benefit from the return to risk assetsAUSTRALIAN DOLLAR ( OANDA:AUDUSD ) ANALYSIS - Australian inflation eases less than anticipated in March and Q1 as a whole - AUDUSD continues to benefit from the return to risk assets AUSTRALIAN INFLATION EASES LESS THAN ANTICIPATED IN Q1 Monthly, quarterly and yearly inflation measures showed disappointing progress towards the Reserve Bank of Australia’s (RBA) target. The monthly CPI indicator for May rose to 3.5% versus the prior 3.4% to round off a disappointing quarter where the first three months of the year revealed a rise of 1%, trumping the 0.8% estimate and prior marker of 0.6%. Generally higher service cost pressures in the first quarter have made a notable contribution to the stubborn inflation data – something the RBA will most likely continue to warn against. The local interest rate is expected to remain higher for longer in part due to the sluggish inflation data but also due to the labour market remaining tight. A strong labour market facilitates spending and consumption, preventing prices from declining at a desired pace. Markets now foresee no movement on the rate front this year with implied basis point moves all in positive territory for the remainder of the year. This is of course likely to evolve as data comes in but for now, the chances of a rate cut this year appear unlikely. OANDA:AUDUSD CONTINUES TO BENEFIT FROM THE RETURN TO RISK ASSETS After escalation threats between Israel and Iran appeared to die down, markets returned to assets like the S&P 500 and the ‘high beta’ Aussie dollar. AUD/USD subsequently reversed after tagging the 0.6365 level – the September 2022 spike low and surpassed 0.6460 with ease. Upside momentum appears to have found intra-day resistance at a noteworthy area of confluence resistance – the intersection of the 50 and 200-day simple moving averages (SMAs). The move could also be inspired by reports of Israel preparing to move on Hamas targets in Rafah, which could risks deflating the recent lift in risk sentiment. US GDP data tomorrow and PCE data on Friday still provide an opportunity for increased volatility and a potential USD comeback should both prints surprise to the upside, further reinforcing the higher for longer narrative that has reemerged. All things considered, AUD may be susceptible to a sifter end to the week.
by Xayah_trading
AUDUSD has mainly oscillated between 0.6680 and 0.6580The Aussie dollar lost ground in the week gone by. AUD/USD has mainly oscillated between 0.6680 and 0.6580 with prices testing the lower bound this week before lifting off it. Australian GDP is due next week as well, with estimates for Q1 suggesting a stagnant start to the year with 0% quarter-on-quarter growth. AUD/USD could continue to drift lower next week due to recent upward momentum in the US dollar and a complicated growth outlook for Australia.
by Xayah_trading
GBPCHF tries to find resistance after recoveryPOUND STERLING OANDA:GBPCHF ANALYSIS - Enough US data to go around this week: ADP, services PMI and NFP - GBP/CHF attempts to find resistance as the pair recovers from overbought territory THERE’S ENOUGH US DATA TO GO AROUND THIS WEEK There is a lack of UK data this week, but it shouldn't be ignored for sterling-related pairs. FX movements increased in Q1 and central banks are now considering interest rate cuts. The question is when will they have the confidence to start. In contrast, US data has been plentiful. ADP data added to the strength seen in the job market. US services PMI data contributed to the dollar's short-term pullback after declines in "new orders" and "prices" in March, resulting in a moderate headline reading of 51.4. There is significant Fed speak today, with Jerome Powell standing out. OANDA:GBPCHF ATTEMPTS TO FIND RESISTANCE AS THE PAIR RECOVERS FROM OVERBOUGHT TERRITORY Now that the Swiss National Bank (SNB) surprised markets with a 25 basis point cut in March, the Swiss Franc appears vulnerable. However, since the SNB meeting, GBP/CHF has failed to trade above the March 21st high, witnessing long upper wicks which ultimately fell short of the mark. The pair also attempts to recover from overbought territory and so there may be room for a shorter-term pullback should bears pile in from here. The gold overlay is the yield differential for the pair (GB 10 year bond yield -Swiss 10 year yield) and has helped, to some degree, explain the path of the pair. Support sits at the recent swing low around 1.1345 with resistance at 1.1487.
by Xayah_trading