Gold
“Everything has its limit - iron ore cannot be educated into gold.”
“Everything has its limit - iron ore cannot be educated into gold.”
Overall Sentiment
- Equity market is at risk of over running too fast – there is an inherent risk that it could reverse – which could boost haven demand
- North Korea threatened to strengthen their nuclear programmes
Speculative funds positioning
- Another weekly decline but the pace has gone softer – but funds are still actively reducing their bullish exposure
Bullish perspective
- Presence of dip-buyers are supportive – it will need follow up buying action this week
Bearish perspective
- Could this be a short-term rebound in gold?
Conclusion – Dollar rebound stalled near technical levels – gold bulls may have rooms to rebound in the short-term but careful about a potential inverse head and shoulder in the Dollar index.
Silver
“If I have cash and I can't figure a way to put it into real estate or my business, I hold it in gold and silver.”
Overall Sentiment
- Very decent reversal daily candle that engulfed Thursday close.
- Silver has a chance to attempt higher this week.
Speculative funds positioning
- Three weeks of decline in its NLFP but the pace has slowed – given recent strength – it could recover again
Bullish perspective
- Speculative gross longs look extended to the downside and could rebuild
Bearish perspective
- Even though speculative shorts are rebuilding – the pace is not fast enough
Conclusion – Short-term support found just above $16.30 per oz but its trading below the 20 WMA – it will need to trade above it this week to advance higher.
Market moving events this week
- Trump’s team of lawyers are helping Mueller with his investigation
- Several candidates are under consideration for the Fed Chair post – Cohn, Powell and Warsh
- On-going concern about Catalonian independence and deep rift in UK politics are likely to give the market food for thoughts
- Fed Meeting minutes this Wednesday could push and pull prices
XAU/USD XAG/USD
US Dollar Index
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