Attention: New Updates

Dear Readers,

We hope everyone have had a wonderful weekend.

The humble beginning of TheBullionTimes started as a baby project in October 2012. Since then, the blog activity kicks off on 7th of April 2015, delivering daily and weekly views on Precious Metal price action.

Throughout the journey, our readers have seen the changes that are made as we continue to work hard and share:

  • Actionable Technical analysis on precious metal price action
  • Challenging Fundamental analysis on general market condition
  • Complementing Inter market analysis on the four pillars (commodities, forex, bonds and futures)
  • Concise, up-to-date and most importantly balanced view

With the end of 2015 fast approaching, we would like to announce more new and exciting changes are coming. We will continue to provide and share our analysis while delivering the changes pace by pace.

Any feedback or suggestions will be very much appreciated.

Best Regards,

TheBullionTimes

Precious Metal Bludgeoned!

  • Gold and Platinum made 2015 new low
  • Palladium retesting 2011 low with a triple bottom potential
  • Silver managed to rebound unscathed but the room lower is there
  • VIX index lower with equity market remain elevated (risk on sentiment dominate)
  • Rumour of SNB intervention – Chinese Equity at risk of further downside
  • Strong USD could remain while Euro look set to make new low
  • December kicks off with various risk events from ECB, RBA and FOMC
  • Various Central bankers set to speak and set the tone for December and into 2016
  • NFP build up and counting down to a US rate hike
  • Geo-Political risks have subsided but any sign of escalation could throw in volatility to the market
  • Expect a nervy start as traders return while trading volume could recede

With Thanksgiving out of the way, the VIX indicator could resume lower – targeting previous low for support. If it fails to find support, we expect a retest of 2015 low at 11.56 and only a break above 17.25 will relieve the selling. A breakout higher cannot be rule out as the current price action may indicate a double bottom formation.

The above 3 charts help to highlight the oversold condition in gold and yet lower prices are expected. We will argue in more details below.

Dollar Technical Outlook

Dollar index is setting up for a bull flag breakout to the upside and a potential AB=CD formation at play. After October low, the bull has returned with a vengeance and these setups for a strong end to the dollar. This view remains viable as long as the ECB deliver on more QE – devaluing the Euro while the FOMC reaffirm their intention for a December rate hike. The only possibility that the dollar index derail from this are – ECB and the FOMC out with the opposite surprises (highly unlikely) or another Chinese yuan devaluation.

With the overextended price action, the most logical trade is to fade the current strength. As the dollar index breached above its upper Bollinger band, it is sensible that profit taking will take place and we witnessed that last week. Technically, we could see a deeper pullback if price broke below the key support (what was strong resistance) but if we get any risk off sentiment and stronger Euro, dollar weakness may continue. However, given that we are 2 weeks away from a potentially more QE from the ECB – dips remain to be a buying opportunity.”

Weekly

Daily

Gold Technical Outlook

As highlighted in last week report, we stressed how gold is set to make another new low. Post Thanksgivings, traders return and gold plummeted lower based on several reasons. First was China equity market sell off, technical weakness as previous low at 1063 does not offer much support, SNB rumour that send USD higher and a rather unlikely rumour that ECB may not add on their current QE programme. The risk reward has certainly changed as we envisage a likely bounce which could play out during December risk events (ECB/FOMC). We cannot rule out a retest lower but a bounce is certainly in store.

“Now it is all about timing for a potential new low on gold for 2015. This new low is going to an important level and could well coincide post ECB and FOMC meetings. Dollar bulls may not have a strong fundamental reason for holding dollar at such a high price then. An end of year short covering bounce in gold could well repeat if the fractal from 14 and 15 is to play out. The risk reward has shifted in favour of going long even when sellers remain in control. We envisaged a dump and pump scenario leaving a long wick into the year end.”

Position Valid Date Price Action Stop Loss Target Results
LONG   1050 Order Placed 1030 1100  

Weekly

Daily

 

Silver Technical Outlook

With gold making a new low, Silver managed to stay just above 13.89 – potentially suggesting that there are no new sellers to absorb the current price action. Overall sentiment remain bearish and the sellers are in control but we cannot rule out that this consolidation phase will remain range trading before we see any spark to the upside. As a guideline, we will only enter a short-term long if price managed to break and close above its 20 ma.

The triple bottom is still much alive but last week price action indicate a very weak bounce even after series of selling. However, it is clear that the extreme bearishness seems to suggest a potential bottoming phase and if seasonality is at play – silver could well have a large flush before a decent rebound. Taking a trade pre ECB and FOMC meeting only invite stop loss to be hit and the price action of the white metal is very much erratic to say the least. We will monitor for now.”

Position Valid Date Price Action Stop Loss Target Results
             

Weekly

Daily

Platinum Technical Outlook

As long the Chinese market continue to wobble with their economic growth, prospect for higher platinum prices is low. If there are production cuts, it could help reduce the selling pressure. Any marked improvement in the Automobile industry could also alleviate but technical picture suggest another test lower is in store. Given that the larger timeframe suggest an RSI divergence, we have placed an order to long platinum for a short term bounce with tight stop.

Very much oversold but sellers remain in control even though we expect a short lived bounce. It will take more than a technical improvement from the chart but also fundamental improvement. We earmarked that platinum has rooms to break lower but any more extreme selling may well see a big rebound in the short term.”

Position Valid Date Price Action Stop Loss Target Results
LONG   795 Order Placed 785 840  

Weekly

Daily

Palladium Technical Outlook

Price action missed touching our buy target by 1.7 and technically, a large divergence is in the making. We maintain our outlook as per last week – current price action seems to suggest that palladium could well have hit bottom. Scrolling out the chart back to 2011 there is support here and a potential triple bottom. Buyers flock in at 530 levels and as long as buying interest appear here then expect a return to the upper channel.

Position Valid Date Price Action Stop Loss Target Results
LONG   525 Order Placed 505 610  

Weekly

This article is written according to the author’s views and by no means indicates investment purpose.

 

 

 

 

 

 

 

 

 

Forex Analysis – GBP/USD & EUR/USD

GBP/USD Analysis

Monthly 

  • GBP monthly has a bearish engulfing candle – BEARISH weight
  • Overall trend shows sellers are in control and the attack for lower key levels is possible
  • 2015 high 1.59291 and low 1.45648 are key levels which we should expect strong reaction

Weekly

  • Fib key levels for 2015 are outlined in the weekly chart above
  • Note how GBP price action has broken below the bear flag formation
  • Weekly candles are bearish after the rejection higher
  • Note the orange key levels is an important area for potential long (1.48124)
  • Monthly and weekly chart seems to suggest that Sterling has rooms lower in 2016

Daily 

  • Overall trend from Monthly to Weekly is super bearish – thus sell on rallies remain the strategy
  • Blue boxes are area of interest for a short term reaction bounce 1.48868 and 1.45648
  • Red boxes are area of interest for sellers to reload and sell 1.52470 and 1.54079

Conclusion

Technically bearish and selling on rallies remain the best strategy. Previous fundamental scenario that support rate hike = stronger GBP has dissipated thus reducing the prospect that BOE is in a rush to do so. This will leave Sterling vulnerable to lower levels in the short to medium term.

EUR/USD Analysis

Monthly

  • Bearish candle that broke previous month low

Weekly

  • 2015 high 1.20051 and low is 1.04590
  • Bear flag formation suggest a continuous move lower with upside limited
  • Selling on rallies continue to be the way forward for now
  • Threatening the 2015 low and potentially target parity

Daily

  • Euro has a potential for a short term bounce higher but need to break out of the wedge
  • Red box indicate strong sell zone on any rallies
  • A break below 2015 low will see a big reaction that trigger stops

Conclusion

A short term bounce is possible via the daily chart but the technical outlook based on the larger timeframe suggests that sellers remain in control. Fundamentally, with ECB expanding their QE programme – the EURO looks doomed for parity if not another new low (before end of 2015? or beginning of 2016?)

 

 

 

Happy Thanksgiving!!!

Dear Readers,

Happy Thanksgiving 2015. Your support and feedback has always been our source of inspiration. Certainly hope to keep this going and if there is anything that can be improve, we look forward to hear it from you.

Best Regards,

TheBullionTimes

 

A Lethal Game – Inter Market Analysis

Dollar Index

Daily

4 hour

Chatter from the ECB has significantly boosted the dollar index this morning. The recent rally in Euro has taken a beating and significant dollar buying returned as traders anticipate an increase in QE expansion, rate cut and also extension of September 2016 timeline. Coupled that with rate hike at 75% in December, the bull continue to stay where they are.

Bunds

Daily

4 hour

ECB blessing to expand its QE programme has made buying the german bunds an easy trade. Post May-June sell off the momentum has been higher but we do note that the bunds could well hit resistance and may be in a phase of distribution (potentially another sell off?) It is too early to tell but the momentum to go higher is there.

Euro

Daily

4 hour

The setup is a one way traffic as nothing has changed – hedge fund has increased short positions – making this trade almost a sure fire for lower euro/usd. Fading the sell off and sell on rallies remain to be the best mantra. Divergences are building up in several time frames – this is something we cannot ignore and a snap back bounce could occur.

Dax

Daily

4 hour

Despite the latest sell off – buying the dip is still the ideal scenario – ECB chatter made it clear that there is no way equity prices could go lower. Dax look set to take out the high and gap fill above 11250 levels. With low volume trading, this can be achieve by end of the week.

Gold

Daily

4 hour

Gold respect the downside channel (see 4 hr chart) – with the dollar strength and overall bearish momentum, rallies continue to be sold. The risk today is a retest of previous low and failure to stay above 1066 will risk a move lower to 1055 before we find any support. Only a break above 1080 will relieve the selling pressure.

Silver

Daily

4 hour

We have a mini mega phone formation and only a break out of this formation – then we can get further directional play. Silver is at its 6th week of red candle with overall bearish momentum. Risk reward has certainly changed but we cannot rule out another retest lower – dump and spike situation.

 

 

Geo-Political Risks – Inter Market Analysis

Video footage published by Anadolu news agency purportedly showing unidentified military aircraft crashing into mountains near Turkey's border with Syria (24 November 2015)

 

Dollar Index

Daily

4 hour

Dollar index remain in situ despite escalation of Turkey – Russia potential issues. History points to dollar buying during such situation and the lack of buying could suggest that dollar bull is very much in place. The high dollar has set up for ECB QE expansion and the imminent US rate hike.

German Bund

Daily

4 hour

Yesterday sell off look technical but the recovery was remarkable to say the least. Buying the dip is very much the strategy but we would like to warn that the bullish channel is broken and price action broke the structure. Only a close above yesterday high will bring about the bullish momentum. Otherwise, we expect a series of consolidation of retest of support below. WIth ECB meeting next week – tight stops is much preferred in taking any trades.

Euro

Daily

4 hour

Long trade in Euro is merely for fading the sell off strength – this remains to be the case as the technical and fundamental reason is to keep selling rallies. Signs of divergence is showing and traders should be cautious to press shorts post ECB and FOMC.

Dax

Daily

4 hour

 

Risk off sentiment sets in – yesterday daily candle also confirms that failure to close with higher high indicate weakness from the bull camp – potentially exhausted. A mini pullback is expected but going short will need to remain cautious as we head to next week ECB meeting. Note how the 4 hour chart maintain a bullish channel.

Gold

Daily

4 hour

Safe haven buying remains weak and gold continue to languish near the 2015 low of 1063.5. Sellers tried to drive lower for a retest but buyers turned up – which could indicate a short term bounce. A tagged on the 20 dma remains a target for short to reload. The overall trend remains bearish despite an oversold RSI.

Silver

Daily

4 hour

Silver look set to make another new low if the 4 hour fractal plays out. Daily chart also indicate a megaphone formation with no conclusion on the next big direction. Despite that, the risk reward is clearly turning for a quick bounce higher before the bearish trend continues. As a reminder, previous daily chart also indicate we have a triple bottom at 13.90 levels which could get retested before we see that bounce.

 

 

 

 

 

Precious Metal:Low of 2015 Bounce

  • Ironically, terror attack brought a quick drop and massive rally across global equity market (Plunge Protection Team at work?)
  • VIX index plummet and crushed despite additional threats
  • Escalation of Syria, Russia and US – South China seas US and China spats
  • CFTC currency report shows increase in short positions except NZD against USD
  • UK recent economic data suggest rate hike could be delay for 2016
  • FOMC foot soldier (speakers) argued December rate hike is imminent
  • China additional stimulus added over last weekend could well support growth till end of year
  • US dollar index remain rather stable though end of the week saw some interest from sellers
  • Japan back in recession mode – but BOJ offer no plans for QE expansion (at least not in 2015)
  • ECB Draghi re-affirm the need for December meeting to commit the need for more QE
  • Baltic Dry Freight index collapse to all-time record lows (Christmas order?)

This weekend report will be kept short with the above point forms but weekly analysis on the dollar index and precious metals are still here.

VIX index has amazingly been crushed over the last week despite terror attack that took place around Europe and Africa.

Next week host several key economic data but the general market mood seems to front run additional QE from the ECB. Data that may affect market such as US existing home sales, consumer confidence, core durable good order, New home sales and a much shorter week with thanksgiving day could send volatile pricing at the start of the week. Month end book squaring will be at play – traders should be cautious with low volume trading.

Dollar Technical Outlook

Very well supported dollar index – bulls remain in control and technically there are room for more upside. Fundamentally, additional QE from the ECB will give dollar a lift though we sense that a top is close for a rather sizeable pullback in the dollar post ECB and FOMC. It will be a while then for a good enough reason to be long dollar posts the above 2 risk events. A blow off top type of formation will be the signal for such a move.

With the overextended price action, the most logical trade is to fade the current strength. As the dollar index breached above its upper Bollinger band, it is sensible that profit taking will take place and we witnessed that last week. Technically, we could see a deeper pullback if price broke below the key support (what was strong resistance) but if we get any risk off sentiment and stronger Euro, dollar weakness may continue. However, given that we are 2 weeks away from a potentially more QE from the ECB – dips remain to be a buying opportunity.”

Weekly

Daily

Gold Technical Outlook

Now it is all about timing for a potential new low on gold for 2015. This new low is going to an important level and could well coincide post ECB and FOMC meetings. Dollar bulls may not have a strong fundamental reason for holding dollar at such a high price then. An end of year short covering bounce in gold could well repeat if the fractal from 14 and 15 is to play out. The risk reward has shifted in favour of going long even when sellers remain in control. We envisaged a dump and pump scenario leaving a long wick into the year end.

“Weakness continues throughout last week as gold try to consolidate around 2015 low. Potentially a double bottom may be in store for a small bounce next week but we favour sellers to continue selling on any bounce. The outlook on gold remains weak and there is no fundamental reason to hold the yellow metal except for a possible spike in VIX. Any equity sell off may see a sliver of hope for gold to test higher in the short term. Additional QE from the ECB may help lift it but FOMC rate hike will dominate.”

Position Valid Date Price Action Stop Loss Target Results
LONG 1050 Order Placed 1030 1100

Weekly

Daily

Silver Technical Outlook

The triple bottom is still much alive but last week price action indicate a very weak bounce even after series of selling. However, it is clear that the extreme bearishness seems to suggest a potential bottoming phase and if seasonality is at play – silver could well have a large flush before a decent rebound. Taking a trade pre ECB and FOMC meeting only invite stop loss to be hit and the price action of the white metal is very much erratic to say the least. We will monitor for now.

The October rally has ended and all the gains made are lost as succession of selling continues. Silver is back to test key support and September low with a potential triple bottom formation. This argument remains slim and a breach below opens the doorway for a new low. With lack of real economic growth and fundamentally too many long contracts – silver may need to flush lower in the coming weeks. We continue with a sell on any rallies and will use 20 wma as our guide.”

Position Valid Date Price Action Stop Loss Target Results

Weekly

Daily

Platinum Technical Outlook

Very much oversold but sellers remain in control even though we expect a short lived bounce. It will take more than a technical improvement from the chart but also fundamental improvement. We earmarked that platinum has rooms to break lower but any more extreme selling may well see a big rebound in the short term.

We have closed one of the short positions to lock in some profit whilst leaving the other one to run and moved stops lower. Once Platinum hit the target, we will look to reassess and look to pullback to re-enter short or have a short-term long to take advantage of any bounce. We have not forgotten the possibility of an inverse head and shoulder but with a weak economic situation and tightening by the Fed-the overall trend remains lower.”

Position Valid Date Price Action Stop Loss Target Results

Weekly

Daily

Palladium Technical Outlook

Last week we highlighted that gains made since 2012 has all but vanished – current price action seems to suggest that palladium could well have hit bottom. Scrolling out the chart back to 2011 there is support here and a potential triple bottom. Buyers flock in at 530 levels and as long as buying interest appear here then expect a return to the upper channel.

Position Valid Date Price Action Stop Loss Target Results
LONG 525 Order Placed 505 610

Weekly

This article is written according to the author’s views and by no means indicates investment purpose. Opinions expressed at Sharps Pixley Ltd are those of the individual authors and do not necessarily represent the opinion of Sharps Pixley Ltd or its management, shareholders, affiliates and subsidiaries. Sharps Pixley Ltd has not verified the accuracy of any claim or statement made by any independent writer and is reserved as their own and Sharps Pixley Ltd is not accountable for their input. Any opinions, research, analysis, prices or other information contained on this website, by Sharps Pixley Ltd, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. Sharps Pixley Ltd will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The data contained on this website is not necessarily real-time or accurate.