Tag Archives: Ukraine

082314 Follow through ahead?

Model Portfolio: Short Signal (7/31)

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Technical Read:  Spot gold dropped through the recent upward trading channel. This combined with the penetration of the July 31st pivot point is bearish action for the yellow metal.  The question is will the breakdown continue?

Backdrop:

  • The US Dollar index broke out to the upside. This is bearish for gold.
  • Leading geo-political events (Gaza, Ukraine and ISIS expansion) are still active but the unrest is largely factored in the market.  At this point, some new accelerant needs to be added to bounce gold higher. Bearish for gold.
  • This week’s Janet Yellen comments from the annual Federal Reserve conference at Jackson Hole were highly anticipated by market participants trying to gauge the future path interest rates. However, the remarks seemed designed to give the Central Bank plenty of latitude in keeping the asset purchase program in place. Interest rates drifted lower in the wake of the event. Bearish for gold.

GH Garrett – Veteran Commodity Watcher

081614 Whew!

Model Portfolio: Short Signal (7/31)

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Technical Read:  Spot gold dropped through the recent 6 day trading range but rallied back into the channel by the end of the day. However, GLD (which has a longer US trading day) was not able to regain its footing. Friday’s trading indicates that gold is becoming susceptible to down drafts.

Backdrop:

  • The US Dollar index was soft on Friday as well but showed relative strength versus gold. This is bearish for gold.
  • The latest chapter in the unfolding Ukraine story now revolves around a caravan of supply trucks Russia is trying to insert into the Ukraine. This is less scary than some of the previous stories. Bearish for gold.
  • The US Commerce Department reported that retail sales flat lined in July (June readings were not very strong either). Remember, if a so-so economy meets a Fed getting ready to exit (to some degree) the central bank’s asset purchase program – Could a round of deflation be far behind (the interest rate market is buying this)? Bearish for gold.

GH Garrett – Veteran Commodity Watcher