Long Term ~ Bearish- Need a monthly close above 1800 to confirm the bull market final phase underway.
Need a monthly close above 1560 to neutralize the trend.
Medium Term ~ Bearish Need a monthly close above 1255 and 1255 to remove bearish trend.
Intermediate Term ~ Bearish– Need close above 1222-1232 for higher TREND.
Short Term ~Neutral/Bearish – caught in a sideways market 1160-1225
Initial Resistance 1192-1198 2nd tier 1202-1209
Support 1172-1182 2nd tier 1158-1164
Our last update listed support at 1162-1172 and the low was 1182.
Resistance was listed at 1205-1212 and the high was 1201.
One the upside, until we take out 1225 and 1255 we remain in a trade range.
Gold short term significant levels
As of writing Gold is down to $1,185. A drop below $1,171.90 (low Jun.15) would open the door to $1,162.10 (low Jun.5). On the upside, the immediate resistance lines up at $1,209.00 (high May 25) followed by $1,215.30 (high May 22) and then $1,219.40 (high May 13).
On the medium term, a gold low at the end of June/early July could produce a rally attempt. This would be in line with the medium term cycle due on June 23rd – July 1st (plus or minus 2 weeks). The short term cycle is due July 1st (plus or minus 72 hours).
Overall odds still favor one final low between Sept 2015 – June 2016. However, until we get a weekly close below 1162, a potential rally can develop in July/August first.
US Dollar Ready to Turn to Haven or Feed on FOMC Rate View
Fundamental Forecast for Dollar:Neutral
The FOMC’s own rate forecasts have projected 50 bps worth of hikes this year.
US Dollar has enjoyed a positive correlation to FX VIX, but its haven appeal is not fully appreciated.
While there may be a lot of volatility for the Dollar moving forward, the medium-term fundamentals carry a positive slant whether general market conditions improve or deteriorate. If the US and global economies move to a more stable and productive state, there is little to throw the Fed off its hawkish bearing for monetary policy – a view that the market still seems to be discounting. If the clouds darken and the financial system starts to seize under the threat of a China-led speculative crush or a Greece-borne European crisis, the Dollar stands ready to accept haven flows. This is a unique position to be in and should keep traders focused.
If the ‘status quo’ of market complacency continues through the forthcoming weeks, the general FX focus is likely to shift back to the theme that has commanded the market for the past year – relative interest rate expectations. Considerable advantage has been conferred to the Greenback for the unique hawkish bearing of the Federal Reserve, but the premium of being a first-mover towards higher yields is not likely fully priced in.
In the short-term, the market is still pricing a significantly divergent view of the liftoff date for the first rate hike from what the central bank itself has projected. Further out, the pace of subsequent tightening (the curve) diverges even further. In the FOMC meeting this past week – which included updated forecasts and press conference – we found a few elements that spoke to the dovish. In particular, the fact that the vote to hold policy was unanimous suggests the most hawkish aren’t willing to start the ball rolling on the more difficult conversations at subsequent meetings.
Yet, a uniform wait-and-see vote doesn’t offset the clearly hawkish views laid out in the forecasts. In the interest rate projections, the Committee is projected two, 25 basis point rate hikes before the end of the year. That is a significant contrast to Fed Fund futures which show the market is pricing in the first move out in January 2016. Given that there are only four more meetings this year and the Fed is unlikely to move back-to-back, the first hike would likely come latest in September if their views hold. Beyond that first move, the curve maintains a hearty premium to the market’s own view through 2016 and 2017.
In the week ahead, the rate forecast will be messaged by the Fed’s favorite inflation gauge: the PCE deflator. It doesn’t need to present a dramatic reading, merely evidence that the slump in volatile components (energy and food) is rolling off.
Rate forecasts will be the natural theme that we return to so long as something more dramatic doesn’t present itself going forward. And really, only one theme has proven itself capable of overriding: risk trends. Risk appetite remains buoyant, but conviction is all but absent. A resolution to Greece and/or stimulus from China to halt the Shanghai’s plunge are possible. However, the true risk is deleveraging finally starting. In that open shift towards safety, the Dollar would surge. -JK
Gold Short Term
The US jobs report released on Friday was strong across the board and that most likely added to the gold pressure felt on Monday as participants keep going back and forth on whether a rate rise is in the cards for gold.
On Tuesday resistance is 1192-1198 and the 1202-1209 area and then 1218-1228 weekly. Look for support in the 1172-1182 area on Tuesday and then 1158-1164.
A daily CLOSE BELOW 1162 will ADD A LOT OF WEIGHT OF BEARISH ACTION and the potential to move to new bear market lows in gold will increase substantially. Until then we remain in a trade range.
If we can hold the 1177 area, it’s possible to bounce back to 1200 this week. But overall, until we close above 1208, its best to favor lower, especially with the short term cycle pointing down to the end of the month.
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YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
