Gold is sideways this morning after a late day selloff during US hours. It seems there are less people with positions to square up before economic numbers as funds pull in the reigns on specing while mgrs await bonuses and owners await new allocations or redemptions.
This makes gold more likely to flatline absent real news. It also makes it more susceptible to wild swings on light volume should some real news come out, or if someone smells blood and runs stops.
Jobs are due at 8:30 today. After that a parade of fed speakers will take stage as the week draws to a close.
Moor Analytics Weekly Report
[Edit: emphasis and chart ours- Soren K.]
Gold (Z) 11/15/17
On a shorter-term basis: I cautioned that an area of possible exhaustion for the move up from 12628 came in at 13077-81. We have rejected $43.9 from this. Decent trade below 12705 (+.2 of a tic (2 cents) per/hour starting at 6:00pm) will project this downward $19 minimum, $44 (+) maximum; but if we break below here decently and back above decently, look for decent short covering to come in. Decent trade above 12876-88 will project this upward $11 minimum, $27 (+) maximum; but if we break above here decently and back below decently, look for decent profit taking to come in.
On a macro basis: I would note that we broke above a well-formed macro line in the week of 8/7 that came in at 12629. The break above here projects this upward $181 minimum, $499 (+) maximum—the maximum to be attained likely within 9-12 months. This line comes in at 12336 this week. I was late to the game on this, but we have come to within $6.8 of the original breakout since I mentioned it, and have a lot of room to go in the projection. Within that we rallied up to a macro resistance line on 9/11 at 13522 that I said we are looking for a multi-week smackdown from--we are seeing some of this as we have come off $89.4 so far. We left a medium term bearish reversal intact above on 9/18 that also warned of continued pressure in the days/weeks ahead. We have seen $48 so far. Within the bearishness I noted that a possible area of exhaustion for this move down from 13624 comes in at 12732-644. We basically held this, but with a $1.6 violation, and rallied to 13084 before rolling over and rejecting from it again. Decent trade below 12671 will project this downward $23 minimum, $97 (+) maximum based off a well-formed formation—the maximum to be attained within roughly one month; but if we break below decently and back above decently, look for solid short covering.
Sincerely, Michael Moor 646-708-4612
Coming up…
Weekly initial jobless claims data are due at 8:30 a.m., with expectations for 235,000 new claimants. Philadelphia Fed Manufacturing data will be published at the same time. There are several Fed speakers today, with Cleveland Fed President Loretta Mester at 9:10 a.m., Dallas Fed President Robert Kaplan at 1:10 p.m., and Fed Governor Lael Brainard at 3:45 p.m.
Forward Guidance
Trump heads to the House before tax vote, Merkel's under pressure in government negotiations, and pound traders only see bad news for sterling.
Fiscal plan
Leaders in the House cleared the way for a vote today on their tax-overhaul bill, with President Donald Trump poised to rally Republican members ahead of the long-waited legislation. Lawmakers are trying to reduce the costs associated with Obamacare in order to help offset the revenue impact of large tax cuts for corporations and individuals. Treasury Secretary Steven Mnuchin, whose signature now adorns the $1 bill, is on a nationwide trip to sell the plan, which still lacks broad public support.
Government talks
German Chancellor Angela Merkel is struggling to form a coalition ahead of a self-imposed deadline at the end of this week. Disagreements over risk sharing in the euro area, curbs on carbon emissions and immigration have made the three-party negotiations particularly difficultas Merkel seeks to secure a fourth term as Chancellor. She doesn’t just face tricky deliberations at home: Brexit negotiations continue to vex euro-area officials, with Merkel wary of pushing Prime Minister Theresa May too hard on the bill for the U.K.’s exit.
U.K. outlook
Options traders are seeing little reason to buy the pound as political discord and economic headwinds create a bearish outlook. In parliament, May is facing a showdown with her own party over a plan to enshrine the Brexit date – March 29, 2019 – into law. Meanwhile, retail sales declined 0.3 percent year-on-year in October, the first drop in more than four years.
Bounce back
Overnight, the MSCI Asia Pacific Index climbed 0.8 percent, while Japan’s Topix index closed 1 percent higher for its first gain in five days, as investors focused on strong earnings growth. In Europe, the Stoxx 600 Index was 0.7 percent higher at 5:55 a.m. Eastern Time as markets in the region started to recover from the longest losing streak in a year. S&P 500 futures were 0.4 percent higher, the 10-year Treasury yield was at 2.361 percent and gold was unchanged.
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