Next two weeks pivotal for precious metals

C

Caput Lupinum

Well-Known Member
Silver Stacker
27th July - Australian inflation figures. A 0.5% or less 2nd quarter inflation reading should see the RBA cut interest rates at the next meeting on 2nd August. 0.6% would be a neutral reading a could go either way and 0.7% or higher reading should see the RBA hold rates. This inflation reading on the 27th should see the Australian dollar move in one direction or the other effecting the Australian dollar gold/silver price. The consensus is for a 0.4% reading

28th July (Australian time) - US Fed meeting. The Fed is expected to hold rates, but their forward guidance will still be important and how cautious they are after the Brexit vote. Will affect the USD gold/silver price depending how dovish/hawkish the guidance is.

29th July - Bank of Japan meeting. The BoJ is expected to make a policy announcement with a fiscal stimulus package which the market has priced in for the most part. Depending on any further surprises or disappointments the BoJ announces, the markets will respond in kind. There's a chance the BoJ may cut further into negative interest rates. The last time they did this in January sent stock markets tumbling and precious metals soring as the Yen rallied. Japanese inflation figures are also due to be released a few hours prior to the BoJ meeting.

29th July - Eurozone and US 2nd quarter GDP flash figures. The strength or the weakness of the figures will impact all markets including gold/silver

1st August - Chinese manufacturing PMI figures

2nd August - RBA interest decision. A 0.25% cut is expected as this stage

5th August - US nonfarm payroll numbers. Will impact the market's expectations of when the Fed may raise interest rates.


Either way the US gold price should either break down below the $1270-$1300 range or have bottomed and be making its way back to the high $1300s and threatening previous resistance levels and the $1400 mark. Interesting times for the money for nothing club members :cool:
 
Caput - if the RBA cut the interest rates on 27th July, say by 25bp, what sort of a move are you expecting for the AUD/USD?
 
The RBA doesn't meet until the 2nd of August if they are going to cut rates. The big move should happen on the 27th as the market will front-run the RBA's decision, but the markets will also be waiting for the US Fed and BoJ meetings the following day. I intend on only trading AUD/USD on Wednesday but will probably close the position not long after the inflation figures hit. I'll then trade the AUD/USD again as the Fed's decision hits and the USD/JPY and Nikkei e-mini on the BoJ meeting.

AUD/USD support levels would be 0.7400, 0.7333 and resistance levels at 0.7570 and 0.7675 on a weekly timeframe. Will check the morning of the 27th on the daily levels though as they would have changed between now and then.
 
Next two weeks pivotal for precious metals


Thanks for that Nostradamus.


Any danger you could pull yourself away from your awesomeness for two seconds and explain to us plebs what that novel you wrote actually means?


Is silver going up or down?

Thanks mate.
 
Well if gold can hold at least $1270-$1300 and silver about $18.00-$18.50 from now until the close of next week, I would say they are going to go up. If not, they should continue to sell off. That's just my opinion.
 
Caput Lupinum said:
Go flip a coin if you want an answer closer to your understanding of how the markets work
Click to expand...

Is there an award for best comeback? :lol:
 
Regardless of opinion please keep it co,img Cl.

I probably get more out of your posts re markets than anyone elses, and when it comes ro this sort of thing I'm a complete novice.

I'd have made some good dough had my partner allowed me to use some money for shares back when youu first suggested SLR etc.

By the time I showed her the growth and convinced her to let me we pretty much got in at the end of the mIn run. In hindsight I should have just gone Head and done it.

Anyway, point to the post. Please dont stop with your market analysis type posts.

Cheers
 
For what it is worth the current volatility of the S and P 500 and the near term futures volatility of the S and P is more than 2 points apart. By definition these 2 numbers have to converge in the next month to be the same value. The trade to profit off of this is to buy an at the money call on both the VIX and the SPX.

In other words the "smart" money in the SPX is saying that either the volatility is going to climb (at a rate faster than the stock market will fall) or the stock market is going to climb.

So, long story longer my guess is on the gold and silver prices falling over the next 2 weeks to whatever level CL guesses.

I however am not putting any money into this trade since it is all tied up at the moment in other trades.
 
Not really interested, it is SHTF Day that counts.

Buy price is the going rate on that day and I take it or leave it. I will sit up and take notice AFTER the big bang happens. I will then laugh at what i paid for the stuff.

JMO


OC
 
Excellent once again Caput. Much appreciated.

Japan's stimulus "flavour" is the big one I think. Not expecting further rate cut there because of the undesired market reaction last time. Market seems to be expecting some form of helicopter money even though it's been denied. Some QE variation or twist could be the go?
 
Inflation came in at 0.4% which was the forecast. Core inflation figures came in a little higher which is why the AUD hasn't sold off as much as I expected, but a rate cut is still definitely on the table. Should continue to see weakness in the AUD heading in the European session tonight before taking back some of the losses before the FOMC decision early tomorrow morning.
 
BuggedOut said:
Market seems to be expecting some form of helicopter money even though it's been denied. Some QE variation or twist could be the go?
Click to expand...

Never Believe Anything Until It Is Officially Denied.
 
BuggedOut said:
Excellent once again Caput. Much appreciated.

Japan's stimulus "flavour" is the big one I think. Not expecting further rate cut there because of the undesired market reaction last time. Market seems to be expecting some form of helicopter money even though it's been denied. Some QE variation or twist could be the go?
Click to expand...

There's lots of rumours and denials flying around about what BoJ may or may not do. Markets have priced in $10 billion in fiscal stimulus through infrastructure spending, but will be demanding more from the announcement. If BoJ disappoints, the markets will sell off hard and the Yen and bond markets will rally. I agree that the BoJ meeting is what the markets are really waiting for.
 
The yen fell after Japan's Fuji TV said Prime Minister Shinzo Abe was planning to announce a stimulus package with a headline figure of around 27 trillion yen.

Abe was later quoted by Jiji news agency as saying the stimulus package, to be announced next week, would total more than 28 trillion yen ($265.48 billion), including 13 trillion yen of "fiscal measures".

That would be bigger than earlier reports of a possible headline figure of around 20 trillion yen.

"We believe that current expectations are for the fiscal package to be done in conjunction with expanded monetary easing," said Lee Jin Yang, macro research analyst for Aberdeen Asset Management in Singapore.

"This belief has been causing dollar/yen volatility with the fluctuations in the reported size of the fiscal stimulus."

The yen extended its drop after the Wall Street Journal reported that Japan was considering issuing 50-year bonds, stirring renewed market speculation about the possibility of debt monetization, but later pared some losses after the Ministry of Finance denied that it was considering issuing such debt.

The dollar last traded at 105.65 yen , up 1 percent on the day. The greenback had risen by as much as 1.8 percent to 106.54 yen at one point, still some way off a six-week high of 107.49 yen set last Thursday.

The focus now is on the Bank of Japan's policy decision due on Friday, with expectations running high that the BOJ will expand its monetary stimulus.

"There's still room for disappointment from the Bank of Japan," said Stephen Innes, senior trader at FX broker OANDA.

"The market's really building up expectations... We've seen this many times before, these expectations can reverse very quickly," he added.

Most market players expect the Bank of Japan to announce more easing measures on Friday, including deepening negative interest rates and increasing its purchases of riskier assets such as stocks as well as government bonds.

But many also believe that any additional stimulus is unlikely to trigger a sustained fall in the yen, given that the currency strengthened even after the BOJ's surprise decision in January to introduce negative rates.
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http://www.investing.com/news/econo...expectations-and-fiscal-stimulus-hopes-416751
 
I think you may have missed the real pivotal key dates/events affecting precious metals prices.

26/7 - comex options expiration.

29/7 - OTC options expiration.

10425_rps20160728_062617_981.jpg
 
Fair call monopolize, though those are technical events rather than being part of the news cycle that affects fundamentals - which is where Caput focuses.

Can be very difficult to determine how expiries will affect prices, even when they're happenning.
 
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