After today's sell-off, Gold is taking a breather in early Asia. President Trump blocked a chip deal today on security concerns which could have had some effect on the gold, though we admittedly can argue in either direction after the announcement.
Here are a couple charts we thought worth noting:
The hourly shows no bounce which makes it vulnerable to algos or a long fund exiting in London hours.
The weekly still shows gold as a long with a weekly stop in the $1300 area inside the bands
The monthly, which has been much cited as reason to get ready for the "big one" due to its wedge breakout looks to us as sickly. The monthly wedge break through is good at month's end. Not something we like using while the candle is forming. But depending on how you draw the descending line, it still says to be long. (Which, incidentally we are in Silver, for different reasons entirely)
We have seen this formation before and seen the next monthly candle gap higher, but one can dream.
Trump blocks acquisition of U.S. chipmaker by China-backed firm, a huge day of data awaits, and oil outlook brightens. Here are some of the things people in markets are talking about.
Bargaining Chips
U.S. President Donald Trump cited national security concerns in blocking the purchase of chipmaker Lattice Semiconductor Corp. by Canyon Bridge Capital Partners, which is backed by a Chinese state-owned asset manager. The Committee on Foreign Investment in the U.S. had previously raised concerns about the potential deal; the White House and Treasury Department indicated that a multi-agency panel had recommended the takeover be stopped. Lattice had sought Trump’s blessingto overrule CFIUS and approve the acquisition. MoneyGram and GenWorth – two firms that may also be acquired by Chinese companies – also retreated in the after-hours session. Trump has blasted China’s practice of forcing firms to transfer their intellectual property and recommended that the U.S. trade representative should consider investigating the world’s second-largest economy over its IP policies. He will reportedly visit China in November with North Korea’s nuclear ambitions high on the agenda, though this move may complicate talks.
Coming Up...
China’s August data dump is expected to showfirming consumption and factory activity while investment moderates with the release of retail sales, industrial production, and fixed asset investment at 11:00 a.m. Tokyo time. There may also be an update on Chinese credit growth and other monetary aggregates. It’s jobs day in Australia, where economists are calling for employment growth of 20,000 in August, with the unemployment rate holding steady at 5.6 percent. Reserve Bank of Australia board member Ian Harper cited persistent under-employment and sluggish pay gains as cause to keep rates at record lows in a phone interview on Wednesday. We’ll also get the weekly update on Japanese international securities transactions, industrial production and capacity utilization figures for July, as well as wholesale price inflation in India for the month of August. Outside of the Asia Pacific region, traders will be keeping a close eye on the Bank of England for a potential hawkish shift as unemployment continues to fall and price pressures pick up steam. And don’t forget about the Swiss National Bank, either.
Third Strongest Rally Ever
Another day, another trio of record closes for the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite indexes. The S&P 500’s rally is now the third-strongest in history, with the benchmark gauge finishing just shy of 2,500. Meanwhile, bond traders are placing some inexpensive bets that there will be another interest rate hike by the Federal Reserve this year ahead of inflation data out Thursday morning. Ten-year Treasury yields and the Bloomberg Dollar Spot Index also moved higher. West Texas Intermediate futures rose more than 2 percent after the International Energy Agency and OPEC boosted their forecasts for demand.
Twice as Strong
NBC News is reporting that North Korea has been observed moving mobile missile launchers over the past 48 hours, per multiple senior officials in the U.S. military, which may be more saber-rattling or a prelude to another test. Kim Jong Un’s regime slammed the recent round of sanctions as “evil” and pledged to accelerate its quest for nuclear capabilities that will allow for a strike against the continental U.S. According to Nikkei, China may have already cut off its textile trade with North Korea ahead of the passage of the UN Security Council’s resolution. New seismic data suggests North Korea’s Sept. 3 nuclear test may have been more than twice as strong as initially estimated.
Futures Up
Nikkei 225 futures are trading to the upside ahead of the open while S&P/ASX 200 futures are virtually flat. The Japanese yen has weakened against the dollar for three consecutive days, something that hasn’t happened in more than three months. The MSCI Asia Pacific Index extended its winning streak to five sessions on Wednesday, its longest run of form in nearly two months – though the technicals suggest the index is currently in overbought territory.
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