Risk-Off- Can Gold Shine?

economic crisis cartoon illustration

Concept Cartoon Illustration of Economic Crisis and Panic Businessman

  • Sell off in global equity continues overnight – Japan Nikkei officially reached bear market
  • Global concern on a potential wave of debt default among commodity related companies
  • Emerging markets continue to suffer with outflow from risk on assets (probably to cash?)
  • Increasing sign of wariness among investors could see more market capitulation
  • Several Oil producing countries are forcing to cut production
  • Safe haven buying in bonds and VIX while precious metals continue to languish
  • ECB press conference tomorrow – Draghi set to be grilled on his next motive as external factors could force his hands to do more QE
  • Saudi Arabia order to halt local riyal forward options – Bloomberg
  • Monte Pasche halted limit down after falling 11% in Milan – Reuters
  • Taliban militants attack University in Northwestern Pakistan

fear greed index

XAU/USD

Weekly

  • The above chart highlighted 2 other potential fractal scenarios which indicate that further upside is favored if price can break and close above the weekly 20 ma this week
  • Positive seasonality and momentum due to rising risk off sentiment should also support this bias
  • Despite that, the overall trend remain bearish but a short term bounce remains in place as we previously highlighted on our articles

Daily

  • Gold daily trading well above the 20 ma – giving good support for higher prices or a retest of previous high
  • RSI is not overbought yet and have rooms higher
  • A break above previous high and 100 ma will give more rooms to target 1130
  • The only caveat is price action remain in a bear flag and a break out below will only reinforce further selling pressure
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s