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Gold to Glitter, but US Dollar could still Simmer – July 23

July 23, 2013
Interaction with my Subscribers during the day…………
5:43 AM   GOLD @ $ 1331 = This is s crucial level, should move beyond $ 1332-34 quickly or else $ 1325-26 before up………
6:20 AM   View on currencies is unchanged…
Gold should hold above $ 1330 levels………..
8:02 AM  sir should buy at 1333 or wait ? because i have missed morning opportunity
8:08 AM   GOLD @ $ 1333 = I am getting uncomfortable with gold because its is losing its charm and see risk that it may not surpass $ 1335-37 and test $ 1325-27 levels.
 9:13 AM   gold long in gold at 27
9:17 AM   Yes, around $ 1325-27…………
9:30 AM   Potebtially could further dip to test $ 1322-24 levels
9:58 AM   sir shall go long aud at 0.9235?
 10:00 AM   Ok, Stops 0.9205…….
10:04 AM  and sir wht about gbp shall go long at 1.5340??
10:06 AM  Yes around 1.5330 wasgood opportunity. Watch 1.5305……….
12:40 PM  what about gold
12:54 PM   GOLD @ $ 1330 = Any up-move will depend on break of $ 1335-37 or else risk is for a fall………….
Some of the developments in US market could have impact on currencies and gold, as US treasuries yield rose sharply. This is why we saw Yen weakening, which means market will be watching today’s 2-year a auction for more clues. One major even that wa over looked in last US Treasury auction was fall in foreign interest. This is because foreign investors that are mostly Central Banks were hesitatnt to invest in US Tresuries that means they fear FED tapering will not only push short term interest rate higher, it also inceases risk for yield to surge. So far US yield has jumped by 4 basis point………….
This may alo put pressure on gold and favours US Dollar. In am waiting for relaese of US Housing Price Index due in 8-minutes for more direction………….
1:00 PM  After Data …………USD Down = Gold Up
1:01 PM   For gold $ 1335-37 is still the crucial upside level
 2:14 PM  Ok pals, nothing new to add, as market is still looking for clear direction.
Earlier view is intact, but profit should be booked, as market will move in narrow range. Stops should be applied.
Cheers until tomorrow…….. 

GMT 2:28 – EURO @ 1.3197 = Euro may finds strong support around 1.3150-70 zones and could gradually inch up towards 1.3230-40 zones, only break will encourage for 1.3270. However, break of support levels would risk test of 1.3115.
GMT 2:35  – GBP @ 1.5372 = Bias is on the upside as long as 1.5340-45 holds on break of 1.5390 for 1.5408, possibly 1.5443 or else 1.5316.
GMT 2:39 – JPY @ 99.48 = Needs to move beyond 99.70-80 zones for 100.05 or else has the ability to penetrate 99.15 for 98.95.
GMT 2:43 –  AUD @ 0.9277 = Today tone is on the upside if 0.9230-40 holds for 0.9320-30 or else 0.9210.
GMT 3:00 – GOLD @ $ 1336 = Choppy move in gold is expected. Watch for $ 1330-32 levels, should hold for $ 1344, or else break sees $ 1320. Suspect there is a minor risk for test of $ 1360-65 zones before down again. Though it could too early to call for upper target.
In my Monday’s weekly post, I warned not be too complacent about Shinzo Abe’s win, as though all odds may favor further weakening of Japanese currency after his election win, but there could be some Yen gains before the next big move occurs. Market did not care about Shinzo’s win because next challenge for the government is to introduce much needed promised structural reforms so that Japan’s economy can grow at a faster pace as Shinzo’s LDP is expected to give tax break to corporations and by making capital investments or else market will not be shy to go in opposite direction.
Meanwhile, in the absence of any major data release, US existing home sales dropped in June, which is not encouraging, as the growth pace in recent weeks have slowed down a bit. One supportive factor could be that the fall is due to fewer homes available, which could only be known after the release of inventory. Today’s US Housing Price Index will give better sense about the housing market recovery.     
While, the up-move in gold has been perfect, but was at very fast pace stretching beyond my target of $ 1330. However, I consider this move, as a good opportunity for those missing the boat earlier to off load their expensive holdings, as nothing extra ordinary has happened to support the Yellow metal. It is an effort by the hedge funds having access to cheap funds caught badly with their purchase at higher levels trying to dictate the market. There is a huge risk that healthier release of US economic data will strength tapering case that should weigh on gold and tapering announcement should further add pressure on gold prices. Hence, I would still prefer to pick the top, though some gain is possible. Do not hurry.
 
Twitter   @asadcmka
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