No Country For Gold Bulls – Daily View 9th June

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED. You can also follow us via TradingView.com for the latest charts update.

Every media and analysts are calling for a disaster waiting to happen in the precious metals market. All 4 metals are trading below the daily moving averages that are rolling over. A stronger USD remains the problem but we must also include the lack of bargain hunters at this price. Physical buying has been lacklustre and with the media speculating deeper correction to 1050, no bargain hunters will touch the metal at its current price.

We cannot rule out that holding gold is relatively expensive compared to holding the greenbacks. Uncertainty over Grexit will continue to exacerbate a weaker Euro and drawing more resources into the US. After a stronger employment data, September rate hike looks imminent at the moment.

We do however, questions if the USD strength has relatively priced in a rate hike and the current strength was merely due to safe haven interest given the Greece scenario?  Rumour about the dollar from President Obama was quickly crushed by the White House – however, it shows the fragility of this rally somehow.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • 1189 and 1197 are next target
  • DMAs 200 at 1209 / 100 at 1206 / 50 at 1197 and 20 at 1196

Daily Support Levels:

  • 1163

We covered some of our short positions ahead of NFP data and holding small positions with stop at break even. Our target remains 15.77 areas and only a strong close with a long green bar will get us excited to trade long. Price action in silver can often be unpredictable and the momentum of a trade is explosive to say the least. The last rallies in precious metal arena have been heavily dictated by this white metal so all eyes on its price action.

We see 15.70-15.80 levels as key support zones. Failure below will then take us to look for the purple line as next key support.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance Levels:

  • 200 ma at 16.77, 100 ma at 16.61, 20 ma at 16.81, 50 ma at 16.52
  • Upper BB line at 17.75

Daily Support Levels:

  • Lower BB at 15.86

Finally a break out of the wedge which will help indicate a short term bottom is in as it found support new previous low (a potential double bottom 1087.5). Our bias is for a relief rally here since it is oversold and given it is still in this downtrend channel (orange dotted line), then an attempt to 100 dma or top of the BB line is possible. In the short term, a reconnect to 20 dma is the potential target. Remember to have a tight stop as we look to go long in this corrective rally.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • 100 dma at 1161 / 50 at 1140 and 20 at 1129

Daily Support levels:

  • Lower BB line at 1115

This is a one way traffic for Palladium prices as selling continues, forming an inverted U – giving back the gains made since April 2015 with a potential for a move lower. We have yet to see any pullback and at the rate it is going, a retest for support at the rising trend line may ease the selling temporarily.

We might consider to place long on a confirmation of another green candle (see yellow box). Otherwise, we maintain a bearish view as Palladium play catch up with the rest of the metals mentioned above.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • Previous daily high at 801.6 and 797.6
  • 200 dma at 787 / 100 at 777 / 20 at 772 / 50 at 771

Daily Support levels:

  • 733 and 720

Economic Calendar & Fundamental Analysis

Tuesday 9th June

  • Chinese CPI was 1.2% weaker than expected and PPI comes is as expected remains weak
  • JPY consumer confidence, PPI data and Aussie Steven Speaks
  • Any talk of phone and positive words PLUS QE then bullish European equities
  • Greece has sent their new proposal / Inflationary pressure in Swiss
  • Euro revised GDP confirmed at 0.4%
  • US wholesale inventories and JOLTs job opening
  • Japan Core machinery and PPI numbers (inflation number that will determine additional stimulus)
  • AUD RBA Stevens speaking
  • Asian Shares all down (risk off) South Korea MERS effect may need government stimulus
  • Chinese data is deflationary worry (additional stimulus needed soon)
  • Weakness in dollar in Asia time zone but as Europe opens dollar resume higher
  • Turkey face early election and turmoil there is causing strength in dollar
  • VIX at 15.18
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