Silver 2016 Targets $ 16 – $10?

 

Silver Monthly

Please go to – https://globalbulliontimes.com/2015/12/02/2016-projection-on-precious-metals/ for a longer term outlook and discussion.

Silver Weekly

Fundamentals:

  • Slowing global economy could really dampen any upside on silver
  • Demand for physical silver coins and bars are rising but has not translated into higher prices
  • Seasonal demand should kick in which favour a short stint of a corrective rally

Technical:

  • Weekly RSI continue to signal a bullish divergence
  • Weekly 50 ma and the upper Bollinger band has been target of a short covering rally
  • Price action remain limited within the descending triangle formation
  • Coming months offer a decent risk reward to play the short covering bounce
  • Upside remain limited at weekly 50 ma or the upper Bollinger band as mentioned before
  • Overall trend is bearish and 2016 could offer a period of consolidation
  • We cannot rule out a new low in Silver in 2016
Advertisements

Platinum 2016 Targets $ 1171 – New Low

Platinum Monthly

  • Watch out how monthly chart indicate confluence sell zone at $ 1171 in Platinum if it ever reach there
  • Monthly RSI is showing a bullish divergence (worth a note)
  • Elliot wave count indicate we are at wave 3 of 5 and a retracement to $ 1171 could be the formation of wave 4 of 5
  • $ 1287 also plays out as strong resistance zone

Platinum Weekly

  • Weekly 20 ma remain as strong resistance and currently confluence with the downward channel (stands at 925 – 950 levels)
  • Bears in full control and only a significant break out of the channel could see price action deviate higher
  • Weekly RSI also confirm that platinum is heading to a potential resistance zone
  • Only if price action break and close above the weekly 20 ma then we can see further short covering action to target the 50% Fib move of 2015 $ 1171 levels
  • Current price action and RSI indicate a short term bounce – seasonality also favor higher prices into Q1 trading period
  • Fundamentally, the supply side in platinum could help propel more short covering
  • Unless we see significant economic growth or exponential demand from Auto sector and Jewelry, biased remain for a retest lower or make new low in 2016

HSBC projection (worth taking into account):

“For palladium, positive auto sector and industrial demand should help stabilize prices,” HSBC said. “Near-term mine supply appears adequate but we expect the market will still run a wide production consumption deficit in 2016, which should support prices.”

HSBC projected a supply deficit in the platinum market for fifth straight year, calling for demand to outpace supply by 227,000 ounces in 2016. The expected 2016 supply deficit for palladium was listed at 703,000 ounces.

Analysts said they foresee a platinum trading range in 2016 of $815 to $1,105 an ounce. Their forecast range for palladium is $555 to $720.

Gold 2016 Targets 1200 – 900 Levels

Gold to target $ 1150 – $1215 level first?

Gold Weekly

2014 – 2015 clues and hints:

  • Ever since 2014, there are 2 short covering peaks in each year
  • Q1 2015 peak is always lower than previous June 2014 peak
  • June 2015 peak stands at 1200 – 1215 levels (Potential Sell  Zone) for Q1 2016 peak?
  • Overall trend remain bearish therefore price rise is only temporary

Fundamental possibilities that could trigger a Q1 rally are:

  • Correction in equity market?
  • Dollar strength curtailed by any further need of another rate hike
  • Further short covering period could go underway
  • Seasonal demand and central banks purchase
  • Cut in production set to kick in (Producers looking to sell their produce at higher price)
  • Money flow into commodities once again as the new year kicks off
  • VIX could land a helping hand if the fear index trigger safe haven buying (see chart below)
  • An unforeseen black swan event?

Technical possibilities and projection that could support a Q1 rally are:

  • Need to break back above the channel (a break above 1088)
  • Rally comes in the form of the initial first run followed by a pullback and then a second rally
  • Watch weekly RSI for clues of a buy able pullback
  • The current weekly price action and RSI does not rule out a retest lower but it could also be a “distribution setup” before a dump and pump scenario
  • Further weakness will only exacerbate the diverging bullish RSI
  • Potential fractal at play with a target of 1150 – 1190 (this area can turn into potential reversal zone)

VIX Weekly

Gold to target 850 -950 levels at later stage?

Fundamental possibilities that could see further sell off:

  • TINA which favour equity (money flow out of ETF)
  • Market sentiment remain bearish in the yellow metal (further outflow of ETF holdings)
  • US gradual rate hike offer better return than safe haven assets
  • Over supply remain the issue
  • Producers could continue overproduction as the cost of production is achievable at around $ 800 per ounce
  • Weakness in commodities currencies persist

Technical possibilities and projection that could see 850-950 levels are:

  • Unless the yellow metal broke above $ 1260 levels the outlook remain bearish
  • Death cross stands as major barrier with weekly 100 ma and 200 ma acting as strong initial resistance
  • Potential fractal repeat of 14 and 15 peak and trough (end of year sell off in gold)

Number of Bearish SPDR Gold Shares Options Fall

lawrieongold

Frank Holmes of US Global Investors‘ latest SWOT analysis for gold

Strengths

  • The best-performing precious metal this week was platinum, climbing 3.03 percent.  Absent any real market moving news, the lift was likely from short covering as platinum prices have been off as much as 30 percent this year.
  • After the losses seen in gold following the Federal Reserve’s rate hike last week, Bloomberg reports that some traders closed their bearish positions on the metal before year-end on speculation that physical purchases may pick up. Further, Bloomberg notes that the put-to-call ratio on SPDR Gold Shares has reached its lowest level since 2008, perhaps indicating that investors who were betting on further declines in gold prices are losing enthusiasm for this trade. Hedge funds reduced bets for a third week that the dollar would advance, according to Bloomberg. The currency is headed for its biggest monthly decline since…

View original post 740 more words

Chart Attack: Forex 2016

Here are some longer time frame look at each currency titans that could shape 2016. This is by no means a view or material that is produce for investment purposes. No indication is made to suggest what may happen but there are some points that are raised by the author.

Thoughts into 2016:

  • Ending the era of cheap money in 2016?
  • Share buy back remains the case for 2016?
  • 2016 to embrace lower prices as company generate lower revenue
  • Normalization could mean a period of consolidation among larger companies
  • More M&A but also there is a growing risk of bailout among companies
  • On the positive side, it is election year so everything should remain rosy right?

Taking a look at some monthly charts which is of interest:

  • Elliott wave count undergoing wave 4? Or we are in a process of wave 5 completion?
  • Election year – does the US economy really need a strong USD?

  • Potential double bottom which suggest this could go higher
  • SNB wants  weaker Swiss Franc to remain competitive
  • A retest to 50% Fib by 2016?

  • At resistance here?
  • Potentially forming a large inverse head and shoulder
  • Current price suggest we are at neckline
  • Only a break below 116 can suggest that we are heading lower to form the right hand shoulder?

  • Holding on the trend line but failure there suggest a retest at 0.600
  • Previous Head & Shoulder may have played out and reached the target

  • Slight similarity to the AUD/USD but has yet rekindle with the long term trend line
  • Nice confluence with 61.8% Fib and the long term trend line may suggest a potential reversal zone?

  • Range trading into next year?
  • Given that AUD/USD may have reached key support, while NZD/USD has rooms to fall – does this suggest a buy here?
  • A potential Inverse head and shoulder formation here to suggest a buy able low?

  • No way to call a bottom but sterling has the potential to repeat 2002 outbreak higher
  • Chart seems to suggest a retest much lower first but mindful that BOE could do a rate hike in 2016
  • Can it get back to its former glory?

  • Ongoing QE program will take EUR/USD to parity even though current chart action suggest a potential bottoming phase
  • 1.0350 seems to be the next stop if price action head lower
  • A tagged on lower of the channel could trigger short covering at least in the medium time frame

  • EUR/GBP may have found a strong support off the rising trend line
  • Only a solid break and close below will undermine the current setup
  • However, given the divergence of weaker Euro going forward and strong Sterling – we cannot rule out this continuous trend

Please let us know your thoughts and if you have a different view on some of the above charts.

 

Outlook 2016: What To Expect In The Year Ahead

By:Investing.com

Despite a tumultuous year in financial markets, the British economy managed to complete its sixth consecutive year of economic growth. The unemployment rate continued to decline to a post-crisis low of 5.2%.

Yet, the Bank of England stood pat leaving its benchmark rateunchanged at 0.50%. The crash in oil prices brought the inflation rate down to hover around zero, well below the BoE’s 2% remit. Weakness in commodities more broadly ensured the FTSE 100would end the year in the red.

What can we expect from UK and global markets over the course of 2016?

We asked some of our top contributing analysts about what may lie ahead:

Britain and the EU: Colin Lloyd

On the face of it, the biggest risk for the UK next year will be the referendum on membership of the EU.

If we remain in (as the majority of opinion polls suggest) we must accept that “ever closer union” is the objective of the majority of our fellow members. If we leave, much will need to be renegotiated.

Either way, uncertainty will act as a drag on the economy. The most likely date for a vote is either June or September, I suspect the latter. Why not 2017? Because of French (March/April) and German (September) elections – I could see a scenario where the vote gets postponed until 2017 in spite of these events.

The next factor influencing markets is the normalisation of regulatory tightening, which has seen UK banks forced to increase their Risk Weighted Assets dramatically over the last six years. The FPC will impose a 1% counter-cyclical capital buffer in the near future, but otherwise the fiscal tightening has finally run its course; this is tantamount to an easing of monetary policy.

The final factor is the state of the government budget deficit. Recent OBR data revealed a marked improvement in tax receipts, but further improvement in the fiscal position relies on sterling maintaining support and interest rates remaining lower for longer. Referendum uncertainty could scupper this “ship of happiness”.

10 year Gilts have traded between 1.34% and 1.92% during the last year. If the US Dollar rallies dramatically during 2016 this may put pressure on Gilt yields, but I think above 2% the stock market will stall, leading to concern about an economic slow-down.

Sterling will continue to be torn between its desire to follow the US$ higher and the depressing pull of a weakening EUR. Cabletraded between 1.46 and 1.58 in 2015. The uncertain state of the EU and domestic political concerns make it likely that we test the downside. The 2009 low of 1.43 is not that far away. That it has not weakened against the EUR suggests that worries about the UK are matched by concern about the entire “Euro Experiment”.

The FTSE 250 has outperformed the FTSE 100 since at least 2012. Technically it corrected 38.2% of the rally from the October 2014 lows to May 2015 highs. The FTSE 100, by contrast, broke down during the summer, taking out the October 2014 low with an almost perfect 23.6% extension to the downside. Since the summer the correction has been lacklustre. The spread, on this basis, looks likely to favour the mid-cap index. By other valuations the UK stock market looks neither over nor under-valued. A PE of 26 is high but interest rates are historically low, CAPE of 12.8 and a dividend yield of 3.7% are supportive. Stay long the FTSE 250 and add on a break.

Bank of England Outlook: Vladimir Harman, World Business Press

First rate hike as early as May or August

So far, the outlook for UK economic growth remains solid. But inflation outlook remains subdued and uncertain. The minutes from the December MPC meeting showed the policymakers saw downside risks to inflation from protracted low oil prices, and weaker unit labor costs growth so far this year. Even though crude prices remain low, its downward pressure on CPI’s annual change will be smoother early 2016 than it was back in 2015, when prices fell much deeper from the preceding year – the so-called base effect. So we may see some gentle pick up in CPI early next year, if all else stays equal, and crude prices remain steady overall. Still, the BoE sees CPI below 1% until the second half of next year.

Other risk stirring up uncertainty is the looming EU referendum. Very much will depend on what news we read on the process of UK’s re-negotiation efforts with EU partners. The better the news, the less ammunition for anti-EU forces in UK, and more tools for Prime Minister David Cameron to stir public opinion towards Britain staying in the EU.

As regards monetary divergence, the Fed eventually ended the era of exotic policy in December. Much will now depend on how it proceeds with tightening cycles next year. Again, all is up to the data coming in. Even though the BoE said in December that it decides solely on the basis of UK inflation outlook, and not on ECB or Fed’s decisions, the fact the Fed moved off the extraordinary measures offers the BoE more comfort in following suit. But, again, all is about inflation and growth in UK. If inflation moves up close to the level the BoE expects towards the middle of 2016, which is around 1%, we could see the first rate hike as early as May or August, which would also coincide with the BoE’s quarterly Inflation Reports.

Sterling Outlook: Simon Smith, FXPro

The naïve view of the UK for 2016 says that we followed the US into this mess and we’re following them out, so on that basis we should expect rates to increase not too far behind the Fed. That’s the naïve view for a reason, as the picture is a lot more complex than that. The first thing is the relative positions of our economies. The US economy took 3 years to regain its pre-cycle peak in output, the UK took 5.5. years. Furthermore, the sluggish pace of the UK recovery in the early years means that the US economy is now 10% above its pre-crisis level and we are just 6%. The caveat has been the labour market. The US was hit hard, the UK less so, but productivity was hit as a result.

For sterling, this will mean that further depreciation against the dollar is seen as I don’t see the BoE putting up rates until the tail end of 2016 at the earliest. Inflation remains subdued and the economy is likely to slow into mid-year, not helped by the uncertainty of a ‘Brexit’ referendum. Look for the pound to move the 1.45 by April, 1.42 thereafter. Against the euro, moves will be more constrained, but it should manage to appreciate as the Eurozone continues emerge from the current deflationary trap, but the 1.45 level should mark the peak for first half of 2016.

I think the yen could be the surprise currency of 2016. Many have been steamrollered by coming up with 20 reasons for the yen to be weaker, only for it to rally. I think 2016 will be one of those years. That could push GBPJPY back down to the 170 level, from 184 at the time of writing.

FTSE Outlook: Jasper Lawler, CMC Markets

The fate of the FTSE 100 in 2016 is likely to again rest more with commodity prices than it is with the strength of the UK economy. In 2015, the FTSE 100 spent most of the year as a serial underperformer because of weakness in heavily-weighted mining and oil & gas sectors which have been caned by plummeting metal and oil prices. Calling the FTSE 100 above 7000 in 2016 could be akin to calling a bottom in Oil and copperprices, not an easy task.

Commodity supply is outstripping demand. The lack of commodity demand can be attributed largely to the slowdown in China. For the FTSE 100, it’s not just miners who are exposed to China but also Asian-focused banks like HSBC Holdings PLC (L:HSBA) and Standard Chartered PLC (L:STAN) as well as luxury brands like Burberry Group (L:BRBY) who were experiencing their fastest growth inside China. If Chinese government stimulus can ease the slowdown in China’s economy, that will be a positive for the FTSE 100.

One area the FTSE 100 has some scope to rebuild in 2016 might be the banking sector. There could well be some more skeletons in the closet of money-centre banks but if the Federal Reserve gets the tightening cycle under way, the BOE could be soon to follow with higher interest rates, allowing better lending margins for the banks.

The housing market is nearing bubble territory so house price gains are not guaranteed in 2016 but it seems likely FTSE 100-listed house builders including Persimmon PLC (L:PSN), Barratt Developments (L:BDEV) and Taylor Wimpey (L:TW) can continue to be beneficiaries of an improving UK economy, low mortgage rates and tight housing supply.

Commodities Outlook:

The Yellow Metal: Andy Farida

Gold to average at $ 1100 in 2016 but comes with a twist!

With no prospect of additional QE from the Federal Reserve, gold in USD (XAU/USD) look set to head lower in 2016. Instead, the Federal Reserve is looking to normalise interest rate by doing a gradual hike. This will allow the USD to continue its appreciation, further increasing the cost of holding the yellow metal that does not bear yield. The overall technical trend remain bearish and what many gold bugs hate to admit – gold has the potential to break below the psychological level of $ 1000.00 before we see any recovery.

As long as the global equity market remains buoyant, momentum buying will continue to favour lower gold prices. Given that TINA (There Is No Alternative), stocks buyback programmes and high valuations on EPS (Earning Per Share) can remain irrational and central banks seems to stand firm to protect a healthy stock market. If we see a mini correction in the global equity market, the rush to safe haven demand on gold will be very appealing even though the upside remain limited to 1160 – 1220 range. Should another crisis happen, we cannot rule out a big short covering move to higher prices.

Fundamentally, the recent low price in gold has affected many miners who are looking to cut back on extraction or opening up new mines. Surplus leads to deterioration on future prices despite a strong demand on physical gold from the likes of China, India and Russia. There is a concentrated effort among miners to reduce availability but mines that were invested during the boom years will remain operational even though the cost of production is higher (loss making).

Considering all the potential scenarios that could happen in 2016, an average price of gold at $1100 may not do it any justice. However, we expect a more volatile year in the price action with potential of a new low.

Richard Perry: Hantec Markets

Gold

Another difficult year ahead for the Gold bugs

Gold moves into 2016 still under a sizeable bearish pressure and the tightening of monetary policy by the Fed should ensure it is another difficult year ahead. The continued subdued outlook for inflation at a time at which interest rate divergence is beginning to take hold will act like a millstone round the neck of any rallies. I expect a choppy year ahead and even though the technicals are pointing towards a potential test of the crucial $1000, however I do not see there too be too much further downside. Trading below $1100 will mean that some of the supply will begin to fall out of the market and this should begin to be supportive. Furthermore there are still some big central banks buying (notably China and Russia) so I expect a trading range between $1000/$1200 for the year.

Brent Oil

Volatility assured but little to cheer for the bulls

In addition to the strengthening dollar, with the chaos and disorganisation of OPEC unable to affect global production levels, the oil price is going to remain under pressure in 2016. However it is as much of a problem with demand as it is supply and with China continuing to rebalance its economy the demand side of the equation is going to struggle once more. It is difficult to see a bottom at the moment with all technical indicators bearish and a test of the 2009 low at $36.20 likely. Unfortunately for OPEC, the lower oil price is driving a leaner, meaner producer of US shale oil which is driving down the cost of production. The question for 2016 could be whether the social unrest in countries such as Venezuela cause a fracture within OPEC, something that could further increase production levels and depress the oil price. I see the price holding below the key $70 resistance and will struggle to breach even $55 on any rebounds.