Gold to $1700 before the end of the year, could even see it nearing the all time high if US stocks take a major hit this Autumn.
Gold and silver have broken out solidly and look to be a vote of no confidence in the major central banks keeping it all together despite industrial production slowing worldwide, trade wars, massive deficit problems, and increasing geopolitical chaos.
For those that want to dip their toes into the water a great way to play gold is via the December Micro Gold Futures.
The problem I always encountered with using correlations over the years is that one never knows when they will come to a screeching halt, due to other energetic vectors coming into the equation.
As just one example today the US stocks are up huge, and the Pound down. This strong correlation that was develping with the Pound and US stocks for awhile has had to deal with various UK domestic headlines that can pull it in all kinds of directions.
On the latest Comey headlines the Dow futures gapped up at the open by around 200 points, and Peso also up big. There is such massive headline risk right now that it can be a challenge to not have devastating gaps through stops.
Interesting chart! I am wondering if a MXN/USD chart would show similar tendencies, the Peso certainly has been reacting to any perceived Trump weakness. Last night I looked for trades using the CME Mexican Peso during the debate, but the reaction was rather muted compared to the first debate!
My vote is based on the supposition of increased risk aversion: Falling US stocks, the Yen inversely gaining proprtionally more strength than the dollar on a classic risk off move, and the increased recent direct correlation between the Pound and risk on or off moves.
I only day trade forex futures on CME. From years of experience, incuding watching most futures traders fail, I believe that it is imperative to adjust leverage to both the market conditions and the condition of one's biology and resulting psychology on a particular day. Thus, on one day I may utilize over 100-1 on say a Euro, Yen, or Pound full-sized contract. But on another day with increase external and/or internal risk, I may opt for only utilizing a micro contract or two, and thus I take the leverage down to 10 or 20 to 1.
I found Ashraf's post on Cable's increased correlation with US stocks over this last month to be one of the more important insights in awhile on this currency pair. Planning to watch this more carefully myself and hopefully put it to great use. Thanks Ashraf!
This is very insightful analysis on an important cycle, Ashraf. Thank you for your generosity in sharing it with us! This gives us traders a nice framework of reference for the next few months, some important things to keep in mind with all the noisy headlines out there.
Not so sure the initial precipitous fall in silver had anything to do with the bin laden news, which came out quite a bit later in the session, correct? If I recall correctly silver fell within minutes of the globex session opening, most of it within only 12 minutes or so, and the BL news hit later that evening. (That is when the equity indexes soared, etc). The silver crash instead looked to me like a speculative attack on silver, perfect timing with much of the world on holiday and very thin trading, such moves often occur during these strategic windows . . .
Ashraf, wishing you all the best during this transition period, and thanks again for the generous sharing of your knowledge and insights on forex and intermarket dynamics. I haven't been on the forum in some time due to my own transition period, but plan to start spending more time here once again, this is a very valuable resource to traders who want to probe deeper into the markets!
Try publishing this in the UK weekend papers: Traders bet BankofEngland will raise rates to 6.25% --highest since 1… https://t.co/GWXrTEAk4R(2 years ago)
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ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (2 years ago)
Jobless claims > 300k before next FOMC meeting would be ideal for Fed to make up for any CPI upside surprise (2 years ago)
"Cook & Eat at Home" scheme may come next to defeat UK inflation... (2 years ago)
Earlier in the week gold selloff was attributed to smaller than exp China EASING. Metal is now holding v well despi… https://t.co/ZW9cmXTPWW(2 years ago)
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Gold and silver have broken out solidly and look to be a vote of no confidence in the major central banks keeping it all together despite industrial production slowing worldwide, trade wars, massive deficit problems, and increasing geopolitical chaos.
For those that want to dip their toes into the water a great way to play gold is via the December Micro Gold Futures.
As just one example today the US stocks are up huge, and the Pound down. This strong correlation that was develping with the Pound and US stocks for awhile has had to deal with various UK domestic headlines that can pull it in all kinds of directions.
My vote is based on the supposition of increased risk aversion: Falling US stocks, the Yen inversely gaining proprtionally more strength than the dollar on a classic risk off move, and the increased recent direct correlation between the Pound and risk on or off moves.