Each Week Lo
ngleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
Weekly Gold Report July 29th through August 2nd
Fasten your seat belts traders, for this upcoming week is about as full as can be with data in the US and across the pond. We begin the week with Pending Home Sales in the US and tonight Japan will report Industrial Production figures. Tuesday provides German CPI and Consumer Confidence number in the US. Traders will have to be up early to see what will likely be more disappointing unemployment figures in Europe, followed by the ADP Employment Report and the US GDP before the opening bell. A few hours after stocks open, we should breeze through the Chicago PMI report in anticipation of this month’s FOMC announcement and Interest Rate Decision where the FED is not expected to make any policy changes. Early on Thursday morning, we hear from the BOE and the ECB regarding their Interest Rates, followed by Weekly Jobless Claims in America, and finally ISM figures after the open. To close out the week, we will see Non Farm Payrolls followed by a speech from a FED Member. And try not to forget that we are still reporting earnings in the United States!
The most important events for traders to follow this week will be Interest Rate Decisions here in the States and in Europe. While there is low expectation for any drastic changes in policy from any Central Banks that report this week, it is always a possibility. Traders are usually more interested in the press conferences and speeches that follow the announcements. It is in these statements that we look for clues on when or if policy changes can be expected. Typically, a FED Member or representative of foreign Central Banks will release information regarding the sector of the market that they hope to see improvement in. For example, the FED continues to peg their participation in Quantitative Easing on the employment numbers. So in this instance, we should see some nice volatility in the markets on Wednesday when the FED makes their announcement, followed by additional movement after Thursday’s Weekly Claims and Friday’s NFP.
While there is low expectation for any big changes in policy across the globe this week, it is still important to understand the anticipatory buying and selling that is done ahead of these announcements. Any unexpected changes in policy has the potential to spark reversals and have an impact on Currencies that will then trickle down across all markets. This week it will be important to have your technical analysis done in advance of the big reports and to be prepared to make adjustments when necessary.
Gold Futures since last week have consolidated right at the resistance level that I pointed out in last week’s Gold Report. After targeting the convergence of three major Simple Moving Averages on the daily chart (the 50day, 100day, and 200day) around $1325 an ounce in the August contract, the futures have traded on both sides of the price with little conviction in either direction. While the moving averages have spread out since last week, the price action was strictly in consolidation mode. It will be difficult this week to predict a directional play while we await reports that have potential to affect all global markets. I will remain neutral on direction in Gold until after we are past this week’s numbers. I will however be interested in intraday movement on the chart to trade.
If you have any questions, please feel free to reach out to me directly. I can be reached via email at
bb****@lo*************.com
or by phone at (888) 272-6926.
Thank you for your interest,
Brian Booth
Senior Market Strategist
bb****@lo*************.com
888.272.6926
** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.
