Gold and Silver Facing Volatile Week With Top-Tier US Data On Tap

Gold and crude oil are staring down a potentially volatile trading week with an abundance of top-tier economic data on tap alongside ongoing geopolitical tensions. Brent and WTI may be left vulnerable to a further correction as Iraqi supply fears remain unrealized, while gains for gold hinge on soft US data and a continued slide in the greenback.

Iraqi Unrest Leaves Crude Production Unimpeded

Fears over supply disruptions to Iraqi crude production continue to influence oil prices as the unrest in OPEC’s second largest producer shows little signs of resolution. Newswires have reported that rebels seized control of a town less than an hour of Baghdad on Friday, as the latest in a series of attacks in the country’s north.

However, at this stage there are no indications that Iraqi oil supply has been affected by the unrest. Indeed, Ministry of Oil officials last week refuted reports suggesting that the country’s largest refinery is under control of rebel militia. As concerns over crimps to supply ease, this could leave crude prices vulnerable to a correction. Similarly as traders discount the potential for a further escalation in the conflict, gold may fail to find further safe-haven demand.

US Data To Catalyze Volatility

Traders will have a bounty of top-tier economic data to digest over the remainder of the week with US NFPs and ISM Manufacturing Data headlining the docket. Patchy US data prints and guarded comments from Fed officials on the timing of a potential rate hike left the greenback to maintain a downward trajectory over June, which aided gold and silver’s recovery for the month. Silver is set to outperform its bigger brother, with a gain of over 11 percent for the month, its largest monthly percentage increase since August 2013.

A series of better-than-anticipated readings from the world’s largest economy this week could spark a bounce for the greenback and put pressure on the precious metals. However, further follow-through and a shift in tides for the USD ultimately hinges on expectations for more aggressive US monetary policy normalization. In this respect the data may come up short, given an incremental data point is unlikely to yield a more hawkish tone from policy makers at this point.

Aside

Gold (H4) – Horizontal Consolidation

The short term trend is neutral
The medium term trend is bullish

The Stochastic is neutral
MACD is bearish

Support level : $ 1,306
Resistance level : $ 1,322

https://www.facebook.com/photo.php?fbid=663503770385846&set=a.306561529413407.68925.104006089668953&type=1&theater

After a nice uptrend, gold consolidates horizontally. The trend remains bullish awaiting confirmation to $ 1330

Target: $ 1,330

Gilles Santacreu

Stocks down on Fed official’s rate hike call; sterling rises

U.S. stocks fell on Thursday after a top Federal Reserve official said interest rates should rise by early 2015, while the pound gained on speculation that UK rates were set to go higher, even as the Bank of England took only mild steps on Thursday to tighten lending.

The euro hit session lows against the dollar after the president of the St. Louis Fed, James Bullard, said in televised comments that raising rates by the end of the first quarter in 2015 would be appropriate, based on his forecast that U.S. growth will register 3 percent for the next four quarters.

“I think Bullard caught most people off guard as the Fed meeting was just last week and there was no explicit reading anyone took from there of a Q1 rate hike,” said Adam Sarhan, chief executive at New York’s Sarhan Capital.

“It’s very possible that he’s on his own or he might have one other Fed official or a minority within the Fed who thinks we should raise rates sooner rather than later,” Sarhan said.

Bullard, a non-voting member of the Fed’s policy-setting committee, said in an interview with Fox Business Network that the U.S. jobless rate will fall below 6 percent later this year. Inflation looked likely to rise back to 2 percent, putting the economy closer to normal than most realize, he said.

The Dow Jones industrial average fell 85.28 points, or 0.51 percent, to 16,782.23, the S&P 500 lost 9.52 points, or 0.49 percent, to 1,950.01, and the Nasdaq Composite dropped 19.10 points, or 0.44 percent, to 4,360.66.

Financial stocks were among the sharpest decliners after a securities fraud lawsuit filed by the New York state attorney general against British bank Barclays. The British bank is accused of giving an unfair edge in the United States to high-frequency trading clients even as it claimed to be protecting other customers from such traders.

U.S.-listed shares of Barclays fell 7.3 percent to $14.57.

U.S. government bond prices rose, with yields on the benchmark 10-year Treasuries note hitting a three-week low at 2.5178 percent.

Sterling rose 0.15 percent to $1.7009 as the steps announced by the Bank of England to cool the UK housing market failed to dampen expectations that the central bank was set to raise rates.

The FTSEurofirst 300 index of top European stocks finished down, provisionally down 0.2 percent at 1,369.41 points, dragged down by the comments by the Fed’s Bullard and by the lawsuit against Barclays.

In commodities, the spot price of gold fell 0.3 percent to $1,315.23 an ounce.

In oil, Brent crude was down 0.6 percent at $113.28 a barrel while U.S. crude slid 1 percent to $105.37 after a bearish turn in the latest U.S. economic data and easing concerns of a supply disruption from the conflict in Iraq.

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تناقض امريكي بين القول و الفعل ….؟

الناتج المحلي الاجمالي / سنوي* (الفصل الاول: : -2.9% مقابل -1.8% تقديري ; -1.0% سابقا .

اسعار الاستهلاك قيمة نواتية* (قيمة فصلية ) الفصل الاول* 1.2% مقابل 1.2% تقديري; 1.2% سابقا .

طلبيات السلع المعمرة : – 1.0%** التقديري – 0.1% والسابق 0.6%.
*قيمة نواتية – 0.1% والتقديري 0.3% والسابق 0.3%.

— السؤال الان: اين هو النمو الاميركي الذي يبرر بلوغ وول ستريت ما بلغه؟
اقتراب ال اس اند بي 500 من ال 2000 نقطة لا يبدو مبررا بحسب بيانات اليوم.

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Oil jumps $1.5 post NY close

Oil had a $1.5 vertical rise in the last few minutes, reaching its highest at 107.43, just a few cents shy from its 2014 peak.

While the catalyst is still unclear, there is chatter in the market about a story Via WSJ as the main catalyst. 

The WSJ reads: “The Obama administration has quietly cleared the way for the first exports of unrefined American oil in four decades, allowing energy companies to chip away at the long-standing ban on selling U.S. crude overseas.”

Technically, Crude Oil remains in a $2.5 day range between 105.10 and 107.60, with a break above the latter potentially opening the doors towards the next key level of resistance circa 108.80/109.00, ahead of 110.0 and 112.00 (levels from Aug 2013).

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The Sunni rebellion in Iraq

Titanic forces are pulling Iraq apart. The best way to avoid years of bloodshed is to hold it together

Jun 21st 2014 | From the print edition

ALMOST a century ago, as war raged in Flanders, Britain took the fateful decision to carve up the Ottoman empire. It wanted to stop Russia and others from gaining influence over Islam that could be used to inflame Muslims in British possessions from Egypt to India. Working with France, Britain set up monarchies and protectorates, forging nations out of the tribes and sects that littered the Ottoman provinces.

After independence this imperial construction continued to be imposed by despots and dictators. Today it is falling apart (see article). At its heart, in Iraq, a Sunni rebellion is boiling. In the past ten days the jihadists of the Islamic State of Iraq and Greater Syria (ISIS) in league with large numbers of ex-Baathists and Sunni militias have taken the second city, Mosul, and swarmed to within striking distance of the capital. Shia-dominated Baghdad is unlikely to fall, but a stand-off beckons in which large parts of Iraq remain in rebel hands and the Kurdish north drifts towards independence. At the same time, Syria is engulfed by civil war, split between a western part under Bashar Assad and an eastern jumble of fiefs and territories under the Kurds and rival Sunni militias. Earlier this month ISIS took a symbolic step towards creating a new Islamic state by bulldozing a berm on the line drawn by French and British diplomats to divide Syria from Iraq all those years ago.

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For the outside world the litany of beheadings, massacres and sectarian hatred raises two questions. Is the old order salvageable in Iraq and Syria? And, if so, is it worth saving?

Tribes with black flags

Across the Middle East, post-imperial despotism has collided with a religious rejection of modernity and an angry youth bereft of opportunities. In Iraq the conflict is especially poisonous because of the invasion in 2003—a fact that its architects, including Britain’s former prime minister, Tony Blair, do themselves no service by denying. The invasion was supposed to replace a dictatorship with a resilient democracy. Instead it implanted al-Qaeda and its foreign jihadists, brutalised the people with years of suicide-bombings, sectarian hatred and insurgency, and paralysed the West’s will to intervene constructively even when there are strong arguments to do so.

What is more, Nuri al-Maliki, the Shia prime minister who eventually emerged, has governed Iraq disastrously. Fearful of a Sunni resurgence and of challenges to his own power, he strangled the institutions of Iraqi democracy in the cradle. Competent army officers were a threat, so he replaced them. Low-level Sunni resistance helped unite his own Shia community behind him, so he repressed Sunnis and excluded them from government. Corruption yielded funds to buy off opponents and reward cronies, so graft flourished.

Many people will now calculate that they can profit from the Sunni rebellion. Iraq’s Kurds have seized full control of disputed, oil-rich Kirkuk. Mr Assad can revel in the seeming proof that the people he is fighting in Syria are both monstrously cruel and the sworn enemies of the West. Iran, which craves regional influence, is needed more than ever by Mr Maliki, a resentful fellow Shia, and it hopes that America may call on it to help repel ISIS. The Arab monarchies wish that Sunni rebels might bleed their rival, Iran, which is short of money and already fighting alongside Mr Assad in Syria. Even Mr Maliki might fancy his chances of tightening his grip on Iraq’s Shia majority—and eventually taking back most of his country.

The one thing that favours Iraq remaining intact is that ISIS’s brand of fanatical Islam and its mission to export jihad threaten everybody. Crucially, that includes the Sunni rebels. Today ISIS conveniently offers them deliverance from Mr Maliki; tomorrow it threatens to impose its own brutal version of Islamic rule. Sunni militias are already fighting ISIS in Syria. Sunni Iraqis fought against its al-Qaeda forerunner once before, during the Sahwa, or Awakening, in 2007-08, thanks to American money and the promise of a stake in the new Iraq. They are allies of ISIS today because that promise was not honoured. For Iraq to remain in one piece the Sunnis must be persuaded to try again, under the assurance that this time Iraq really will be a federal state in which power is shared in Baghdad and institutions like the army regain their national character.

The sectarian Mr Maliki is not the man to win the Sunnis over. Ideally his Iranian backers would force him to give way to a new prime minister. Similarly the Arab monarchies might lean on Iraqi Sunnis to reject ISIS, and the Turks might make clear to the Kurds that they should not rush towards independence, but also give federalism a chance.

America can help with the Kurds, but its role should chiefly be to knock diplomatic heads together so as to prise Iraqi Sunnis from ISIS by encouraging a temporary convergence of regional interests. America should be in no hurry to deploy aircraft and drones—for fear of widening the very sectarian divide that it wants to narrow. The time for military action may come later, if Baghdad is imperilled or ISIS threatens to spread global terror from its jihadist camps. As part of the campaign against ISIS, America should accelerate and augment its policy of training and arming more moderate Syrian forces. That would, incidentally, strengthen the rebellion against Mr Assad, who has all along cynically fomented jihadism in order to make himself appear the lesser of two evils.

Worth fighting for

Winning over Iraqi Sunnis and corralling regional rivals will not be easy. But it is worth trying. The Middle East’s imperial boundaries are flawed—but so is every other plausible set of lines. The break-up of the Balkans showed how much blood is spilled when people redraw their borders using force. In Iraq and Syria the process could take years—and would feed sectarianism and global terrorism. It might spread to other countries, such as Lebanon and Jordan, created by the same imperial geographers. And when at last peace comes, it will inevitably require an acceptance that people have more to gain from accommodation than from shutting each other out. Better on balance to aim for that now, within today’s flawed borders, than to sit back and watch Iraq go up in flames

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The pain of Spain

 

Why Spain’s exit from the World Cup is good news for goal-hungry fans

ADIOS, Spain. The World Cup holder’s early exit from the 2014 tournament has already been assured after two dismal defeats. On June 23rd La Roja will attempt to salvage some pride in their third and final match, against Australia. Spain’s innovative “tiki-taka” style of play, typified by zillions of short passes, had once propelled it to the top of the world rankings, two European championships and World Cup glory. But even then, for goal-hungry fans, watching Spain pass the ball into the back of the net could at times (whisper it) be a little dull. Nor was it frequent.

Spain scored the fewest goals of any World Cup winning team, as the chart above shows, finding the net only eight times in 2010 (while conceding twice). It also has the lowest average goals per game, managing just 1.14 across seven matches. The next lowest-scoring team in the modern era, Brazil, managing 11 goals over seven games in 1994, and has the next-lowest average too. (England in 1966 and Italy in 1938 also scored 11, but at completely different periods in the Cup’s history and over fewer games.)

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This World Cup has seen more goals at this stage than at any time in decades. Could West Germany’s record of averaging more than four goals a game in 1954 be surpassed? That will be difficult—football 60 years ago is a world away from the hyper-trained sport it is today. But one candidate may be the Netherlands—who put five goals past hapless Spain in their first match.

BPUSD at highest since Oct ‘08

BPUSD at highest since Oct ‘08

There were two big stories in FX yesterday: the fall in the US dollar and the British pound’s continued strength. The greenback initially fell in the aftermath of Wednesday’s FOMC meeting and the US Federal Reserve Chairman’s subsequent press conference. The overall takeaway from the meeting was that the Fed is more dovish in its thinking than most analysts anticipated. The Fed’s outlook wrong-footed investors who had expected the US central bank to signal a faster rate of monetary easing.

In contrast, the British pound pushed higher once again. Yesterday’s move meant that sterling has put a lot of blue water between itself and the 1.7000 level against the US dollar. This has led to renewed speculation that cable could be back on its way towards 2.000 – a level last achieved in March 2008. The GBPUSD is firmer again at the time of writing.

Yesterday’s biggest story was FX-related as it was the stunning move in precious metals. Gold tore through $1,300 to close out at its highest level since April this year. Silver’s rally was even more impressive as it ended around 5% higher to reach its best level in twelve weeks. The rally in the two precious metals may have been triggered by the Federal Reserve’s hawkishness, but yesterday’s rallies point to something more fundamental in these markets. There are suggestions that investors with large short positions have been forced to cover as fears grow over the worsening situation in Iraq, Federal Reserve dovishness and the potential unwinding of Chinese commodity financing deals.

Today’s significant data releases include the Euro zone Current Account, UK Public Sector Net Borrowing, Canadian CPI, Canadian Retail Sales and Euro zone Consumer Confidence. ECOFIN meetings are also taking place today.

David Morrison

 

 

 
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Usa500: The next big barrier to overcome is the 1,954

European shares closed flat yesterday, as investors awaited the Federal Reserve’s policy decision. Speculators are looking for hints of a specific timeline for when the Fed may raise rates.

FOMC decision wrap-up:
·         Leaves rates unchanged at 0.25%;
·         Cuts QE3 pace to 35bln/month
·         Low rates for considerable time after QE end;
·         At least 1% Fed Fund Rate at the end of 2015;
·         At least 2.5% Fed Fund Rate at the end of 2016.

The next big obstacle for markets is to overcome is the 1,954 area on the Usa500, which is the site of its former all-time highs and a move above there would likely follow through to 2,000. Meanwhile, 1,917 is the key level of support to hold.
 
Expecting upward trajectory to new highs at 1,954 on the break above previous day high at 1,945.50 (scenario 1) or a break below previous day low at 1,929.5 could start a downward spiral to 1,917 (scenario 2).
 
Usa500 is a CFD written over S&P500 futures