1700 per ounce of gold, another crisis signal, Powell's speech

26 thg 6, 2019

Fed’s monetary policy vector changes, the pressure between the US and Iran has reached a critical level, the overall high level of investor concern led to the fact that gold almost reached 1140 yesterday. As a result, an increasing number of traders and analysts are turning into purchases. In particular, Marc Chandler from Bannockburn Global Forex believes that a breakdown of 1400 opens the way for gold to 1700. We are far from being so optimistic and we will look for points for its sales.

In the meantime, analysts are continuing to look for signals about the coming crisis. Earlier, it was the inversion yield curve inversion, the departure of the Real Monetary Proposal to zero, the cycle theory, the decline of America's auto industry. The Fed is changing its approach to monetary policy by changes tightening and so on... Small-cap companies, as well as transport company stocks relative to the SP500 index dynamics, have shown the worst dynamics since 2009 (!). In theory, small-cap companies should grow much more actively than high-cap companies. And we are now seeing a kind of inversion. This inversion, according to analysts, is a disturbing signal and is a harbinger of the coming crisis.
Data from the United States came out quite weak. New home sales also disappointed with 626k, missing expectations of 684k, as was the Conference Board said its consumer confidence index dropped 9.8 points to a reading of 121.5 this month, the lowest since September 2017.

Jerome H. Powell, chairman of the Federal Reserve, said Tuesday that the downside risks to the US economy grew, but he avoided the topic of lowering rates. So the dollar received some support. Therefore we will use this dollar growth solely for the purpose of selling it more expensively.
Today, surges of volatility in pound pairs are quite possible. The Bank of England (BOE) inflation report hearings will hog the limelight this Wednesday. Governor Mark Carney’s testimony will be closely heard, in the face of the recent dovish tilt. Note that the hearings will be on the May inflation report.

In addition, data on orders for durable goods and the US trade balance may well lead to the formation of local trends in dollar pairs.

Our trading preferences for today: we will continue to look for points for sales of the US dollar against the Japanese yen, euro, and pound. We continue to wait for a gold correction and look for points for its sales. And also we will actively sell the ruble both on the intraday basis as well as medium term.