Price of Gold Fundamental Daily Forecast – Strong Consumer Inflation Data Will Dampen the Mood for Gold Bulls

Gold futures are trading lower on Friday in a subdued trade ahead of the release of key U.S. economic data later in the session that could lead to a major change in Federal Reserve policy. The market is being capped by firm U.S. Treasury yields and underpinned by a drop in the U.S. Dollar against a basket of major currencies.

At 08:59 GMT, December Comex gold futures are trading $1790.10, down $4.30 or -0.24%.

Due to the elongated sideways trade, even fundamental traders are paying close attention to the technical chart pattern especially the 50% levels at $1795.00 and $1800.00.

Technicians are looking for an upside bias to develop on a sustained move over $1800.00 and for the downside bias to extend on a sustained move under $1795.00.

Treasury Yields Rise Ahead of Inflation

U.S. Treasury yields rose early Tuesday, ahead of the release of closely watched inflation data later in the morning. Treasury yields are a major influence on the direction of gold prices. This is because gold doesn’t pay any interest to hold it. So when yields rise, gold becomes a less-desirable asset.

The yield on the benchmark 10-year Treasury note climbed nearly 2 basis points to 1.341%. The yield on the 30-year Treasury bond added 1 basis point at 1.917%.

Dollar Steadies Below 2-1/2 Week High Before Inflation Data

The U.S. Dollar steadied below a 2-1/2 week high that was hit the previous session, as investors braced for inflation data that might offer clues on the timing of policy tightening by the Federal Reserve at its September 21-22 meeting.

The direction of the dollar at times also drives the price action in gold but not as strongly as Treasury yields. Gold is a dollar-denominated asset so when the greenback is strong, foreign demand for the precious metal tends to drop. A weaker dollar tends to be supportive for gold prices. This assessment may not adhere on a day-to-day basis, but over the long-run it tends to be valid.

Daily Forecast

Gold investors will be watching today’s U.S. Consumer Price Index (CPI) report very closely because it will likely influence next week’s Federal Reserve decision on tapering its massive stimulus. The report is due to come out at 14:30 GMT.

Economists expect core consumer price inflation, an index which strips out volatile energy and food prices, to have risen 0.3% in August from July.

High inflation is the major reason why the Fed can’t keep pumping stimulus into the economy. If the CPI data comes in higher-than-expected then look for the same reaction we saw last week when the U.S. reported stronger-than-expected producer price inflation – Yields and U.S. Dollar up, gold prices down.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Mixed Ahead of US Inflation Data; Cyclicals Drive Japan’s Nikkei to More Than 31-Year High

The major Asia-Pacific stock indexes traded mixed on Tuesday, with investors eyeing U.S. inflation data for more clues on when the Federal Reserve will begin reducing its massive stimulus.

Locally, investors remained on edge over China’s tightening grip on its technology companies and a widening liquidity crunch for the country’s most indebted developer.

Cash Market Recap

In Japan, the Nikkei 225 Index settled at 30670.01, up 222.73 or +0.73%. Hong Kong’s Hang Seng Index is trading 25501.32, down 312.49 or -1.21% and South Korea’s KOSPI Index finished at 3148.83, up 20.97 or +0.67%.

In China, the benchmark Shanghai Index settled at 3662.60, down 52.77 or -1.42% and in Australia, the benchmark S&P/ASX 200 closed at 7437.30, up 12.10 or +0.16%.

US Consumer Inflation Data on Tap

The U.S. is scheduled to release its August report on consumer inflation at 12:30 GMT. The Consumer Price Index (CPI) is expected to show core consumer prices rose 0.3% in August. Prices were up 0.3% the previous month and 0.9% in June. Economists expect annual inflation to ease slightly to 4.2% from 4.3% in July.

China Shares Fall as Evergrande Woes Weigh on Property, Financials

Chinese shares closed lower on Monday, dragged by real estate and financials after the country’s most-indebted developer warned of a risk of a cross-default.

Property developers tumbled 3.8%, while the financials sub-index shed 2.9% after cash-strapped China Evergrande Group warned of a risk of cross-default as real estate sales continued to plunge.

The developer’s struggles to quickly sell off assets and avert defaults on its massive liabilities are raising the risk of contagion for other privately-owned developers, fund managers and analysts say.

Japan’s Nikkei Ends at Over 31-year High as Cyclicals Shine

Japan’s Nikkei closed at a more than 31-year high on Tuesday, led by cyclical stocks tracking overnight Wall Street gains, while progress in domestic vaccine rollouts raised hopes for an economic reopening.

Sentiment was also boosted by hopes for an economic reopening as Japan is on track to reach the vaccination levels of the United States and Europe. The government said on Tuesday more than 50% of Japan’s population have been fully vaccinated.

South Korean Stocks End Higher Ahead of US inflation Data

South Korean shares ended higher on Tuesday, buoyed by foreign buying after overnight gains on Wall Street, while investors awaited U.S. August inflation data due at 12:30 GMT.

Among the heavyweights, chip giants Samsung Electronics and SK Hynix rose 0.39% and 0.94%, respectively, while platform companies Naver and Kakao fell 1.35% and 0.40%, respectively.

Foreigners were net buyers of 294.0 billion won ($251.14 million) worth of shares on the main board.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 92.600 on Tuesday Sets Early Tone

The U.S. Dollar hit its highest level against a basket of major currencies since August 27 on Monday as market expectations build that the Federal Reserve could taper its massive stimulus sooner than previously anticipated despite rising COVID-19 cases.

The index rose sharply early in the session on follow-through buying tied to Friday’s stronger-than-expected August producer price index, but it gave back most of its gains when U.S. Treasury yields fell.

At 20:46 GMT, December U.S. Dollar Index futures are trading 92.630, up 0.056 or +0.06%.

Traders will now be looking to the August consumer price index, a more direct measure of inflation, which is due to come out at 12:30 GMT on Tuesday. Economists surveyed by FactSet are expecting the reading to show that consumer prices jumped 5.3% on an annual pace in August.

A higher than expected CPI reading could move the Fed closer to announcing its tapering timeline at its September 21-22 policy meeting. Treasury yields could rise on the news, making the U.S. Dollar a more attractive asset.

Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trade through 92.850 on Monday changed the main trend to up. A move through 92.315 will change the main trend to down.

The short-term range is 93.710 to 91.935. Its retracement zone at 92.825 to 93.050 stopped the rally at 92.88 on Monday.

Short-Term Outlook

The direction of the December U.S. Dollar Index early Tuesday is likely to be determined by trader reaction to 92.600.

Bullish Scenario

Look for an early upside bias on Tuesday on a sustained move over 92.600. If this move creates enough upside momentum then look for the buying to possibly extend into 92.825, followed closely by 92.880.

Overtaking 92.880 will indicate the buying is getting stronger with the short-term Fibonacci level at 93.050 the next likely upside target.

Bearish Scenario

A sustained move under 92.600 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at 92.315. Taking out this level will change the main trend to down.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Update – Strong Upside Momentum Targets $71.85, Followed Closely by $72.61

U.S. West Texas Intermediate crude oil futures hit their highest level since August 2 on Monday as U.S. output remains slow to return two weeks after Hurricane Ida slammed into Gulf Coast production facilities and refineries. Meanwhile, fresh speculative buyers came in strong as another tropical storm approached the Texas coast, putting its output at risk.

At 20:20 GMT, December WTI crude oil is trading $69.99, up $0.86 or +1.24%.

The buying on Monday was strong enough to offset potentially bearish demand news. The Organization of the Petroleum Exporting Countries (OPEC) trimmed its world oil demand forecast for the last quarter of 2021 due to the Delta coronavirus variant.

OPEC said further oil demand recovery would be delayed until next year when consumption will exceed pre-pandemic rates, Reuters reported.

Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers took out the previous main top at $69.95. A trade through $67.04 will change the main trend to down.

The main range is $72.61 to $61.11. The market is currently trading on the strong side of its retracement zone at $68.22 to $66.86, making it new support.

The new short-term range is $61.11 to $69.95. If the main trend changes to down then look for a break into its retracement zone at $65.70 to $64.61.

Short-Term Outlook

Trader reaction to the former main top at $69.95 will set the early tone on Tuesday. If the buying is strong, then the market should continue to move towards the next upside target at $71.85, followed by the contract high at $72.61.

A sustained move under $69.95 will indicate the buying is getting weaker. If this move creates enough downside momentum then look for a pullback into the Fibonacci support at $68.22. Since the main trend is up, buyers are likely to come in on the first test of this level.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Futures (GC) Technical Analysis – Straddling Pair of 50% Levels at $1795.00 and $1800.00

Gold futures are inching higher late in the session on Monday, underpinned by lower Treasury yields, but capped by a stronger U.S. Dollar. Volume is well below average with most of the major players on the sidelines ahead of the release of U.S. consumer inflation data on Tuesday. The reading could dictate the direction of the Federal Reserve’s monetary policy.

At 19:23 GMT, December Comex gold is trading $1795.00, up $2.90 or +0.16%.

U.S. 10-year and 30-year Treasury yields are under pressure late Monday on safe-haven buying tied to another sell-off in the U.S. equity markets. The U.S. Dollar is being supported by increased bets on sooner-than-expected tapering by the U.S. Federal Reserve after August’s Producer Price Index jumped more than expected on Friday.

Stronger-than-expected consumer inflation numbers on Tuesday will likely solidify an early tapering. Although the Fed has called the rise in inflation “transitory”, it looks as if it is getting close to getting out of control in my opinion. This could hurt labor market growth, which the Fed says is its number one goal.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $1781.30 will change the main trend to down. A move through $1774.60 will reaffirm the downtrend. A trade through $1836.90 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through the minor bottom at $1783.10 will indicate the selling pressure is getting stronger. A move through $1806.00 will change the minor trend to up.

Resistance is a pair of 50% levels at $1795.00 and $1800.00. This is followed by a Fibonacci level at $1828.80.

On the downside, the nearest support is a 50% level at $1757.40, followed by a Fibonacci level at $1738.60.

Daily Swing Chart Technical Forecast

The near-term direction of the December Comex gold futures contract will be determined by trader reaction to the pair of 50% levels at $1795.00 and $1800.00.

Bearish Scenario

A sustained move under $1795.00 will indicate the presence of sellers. The first downside target is $1783.10, followed by the pair of 50% levels at $1781.30 and $1774.60.

Taking out $1774.60 could trigger a further decline into $1757.40 to $1738.60.

Bullish Scenario

A sustained move over $1800.00 will signal the presence of buyers. Taking out the minor top at $1806.00 could trigger an acceleration to the upside with $1828.80 the next likely target.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stock Indexes Finish Mostly Higher; Hang Seng Tumbles 1.5% as China Tech Crackdown Continues

The major Asia-Pacific stock indexes finished mixed on Monday with shares in Hong Kong taking a more than 1.5% hit following a Financial Times Report that Beijing wants to break up Ant Group’s Alipay and force the creation of separate loans app.

Shares in China manage to eke out a small gain despite a sharp drop in Chinese electric vehicles stocks, which fell after the country’s industry minister said consolidation in the sector is needed as there are “too many” EV makers in China. BYD dropped 2.14% while Xpeng slipped 2.35%, CNBC reported.

Cash Market Recap

Gains in China were also capped by a 34.57% plunge in shares of Chinese property developer Soho China after a takeover deal by Blackstone Group fell through. Soho China said in a filing on Friday that Blackstone has decided not to go through with its $3 billion bid to buy the developer.

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 30447.37, up 65.53 or +0.22%. Hong Kong’s Hang Seng Index finished at 25813.81, down 392.10 or -1.5% and South Korea’s KOSPI Index closed at 3127.86, up 2.10 or -0.07%.

In China, the benchmark Shanghai Index settled at 3715.37, up 12.26 or +0.33% and in Australia, the benchmark S&P/ASX 200 Index finished at 7425.20, up 18.60 or +0.25%.

Hong Kong Shares Drop, Dragged Lower by Tech on Latest Crackdown

Hong Kong shares finished down on Monday, dragged lower by internet giants following a slew of moves by Beijing to crack down on the country’s technology sector, Reuters reported. Shares of tech giants Meituan, Alibaba Group and Tencent Holdings dropped 4.5%, 4.2% and 2.5%, respectively.

The latest moves in Beijing’s crackdown include telling delivery and ride-hailing firms to better protect workers, breaking up Ant’s Alipay and forcing creation of separate loans app, and telling internet giants to stop blocking each other’s website links from their platforms.

China’s Blue-Chips End Lower as Lending Data Disappoints

Chinese blue-chips ended lower on Monday, dragged down by semiconductors and tourism stocks, after official data showed new bank lending in Beijing rose less than expected last month, while Shanghai shares closed higher. Chinese banks extended 1.22 trillion yuan in new yuan loans in August, up from July but falling short of analysts’ expectations.

Aussie Shares Gain on Boost from Sydney Airport, Energy and Materials Stocks

Australian shares rose on Monday, boosted by airport operator Sydney Airport Holdings surging on an improved takeover bid and solid gains in the energy and material stocks.

Sydney Airport Holdings advanced as much as 5.1% to its highest in over a year after bidder Sydney Aviation Alliance increased its offer price to A$8.75 from prior proposals at A$8.45 and A$8.25, to acquire all shares in the airport operator.

Energy stocks rose 1.25% after oil prices hit a one-week high on concerns over U.S. supplies, along with higher demand hopes.

Major miners rose 1.06% led by lithium-boron supplier Ioneer Ltd, up 7.58%, followed by lithium miner Pilbara Minerals Ltd, gaining 7.32%.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500, NASDAQ Composite Reverse Gains, Turn Lower after House Democrats Propose New Tax Hikes

The S&P 500 Index and the NASDAQ Composite Index fell sharply shortly before the mid-session on Monday after U.S. House Democrats laid out their plans for massive corporate and individual tax rate increases. Meanwhile, the Dow Jones Industrial Average was able to hold onto most of its earlier gains.

At 16:08 GMT, the benchmark S&P 500 Index is trading 4459.33, up 0.75 or +0.02%. This is down from an intraday high of 4492.99.

The blue chip Dow Jones Industrial Average is at 34848.22, up 240.50 or +0.69%. It’s high of the session is 34939.10.

The tech-heavy NASDAQ Composite is trading 15062.85, down 52.64 or -0.35%. This is down from an intraday high of 15215.44.

US House Democrats Propose Hefty Corporate, Personal Tax Hikes

Leading Democrats in the U.S. House of Representatives said on Monday they are seeking to raise the nation’s top tax rate on corporations to 26.5%, up from the current 21%. The proposal also calls for a top individual tax rate of 39.6%. Additionally, the proposal includes a 3% surcharge on individual income above $5 million and a capital gains tax of 25%.

According to Reuters, the powerful House Ways and Means Committee said it will debate legislation this week that would achieve the change as part of Democrats’ broader, $3.5 trillion domestic investment plan.

House Ways and Means Chairman Richard Neal will attempt to win the committee’s approval of the tax changes that are aimed at helping pay for the $3.5 trillion bill to expand social services for the elderly and children and tackle climate change, Reuters reported.

Neal wants to set a graduated corporate tax rate of 18% on annual income below $400,000, 21% on income up to $5 million and 26.5% on income above $5 million.

His proposal also would increase the capital gains tax rate for those with incomes above $400,000 to 25% from the current 20% and include an additional 3% surcharge on taxable income in excess of $5 million.

The House proposal would take huge steps to reverse the 2017 Republican tax cuts. It would take the corporate rate to 26.5%, after the GOP slashed it to 21% from 35%.

S&P, NASDAQ Give Back Earlier Gains while Dow Holds Steady

The Dow Jones Industrial Average gained Monday as the index rebounded from a losing streak. The blue chip average’s bounce comes after the Dow and the S&P posted a fifth straight day of losses Friday, while the NASDAQ Composite registered its third consecutive negative session. For the S&P 500, Friday marked its worst losing streak since February 22.

For a look at all of today’s economic events, check out our economic calendar.

E-mini S&P 500 Index (ES) Futures Technical Analysis – Approaching Major Target Zone at 4439.50 – 4416.00

December E-mini S&P 500 Index futures are trading a little higher shortly before the mid-session in a volatile session. The benchmark index opened strong, hit minor resistance then sold off enough to turn the index lower for the session. Prices then rebounded as the market neared major retracement zone support.

At 15:41 GMT, December E-mini S&P 500 Index futures are trading 4451.75, up 2.75 or +0.06%.

Traders blamed a sell-off in the technology sector for the weakness. Meanwhile, the Dow held on to its gains. This suggests investors were selling overvalued technology shares.

The likely catalyst behind the intraday sell-off was the release of the House Democrats outline for tax increases they aim to use to offset up to $3.5 trillion in spending on the social safety net and climate policy.

Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 4539.50 will change the main trend to up.

The minor trend is also down. A trade through 4519.75 will change the minor trend to up. This will shift momentum to the upside.

The main range is 4339.75 to 4539.50. Its retracement zone at 4439.50 to 4416.00 is the primary downside target and value zone. Look for aggressive counter-trend buyers on the first test of this area. If it fails then look out to the downside.

The minor range is 4519.75 to 4442.25. Its 50% level at 4481.00 is the first upside target.

The second minor range is 4539.50 to 4442.25. Its retracement zone at 4491.00 to 4502.50 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index into the close on Monday will be determined by trader reaction to 4449.00.

Bullish Scenario

A sustained move over 4449.00 will indicate the presence of aggressive counter-trend buyers. If this move creates enough upside momentum then look for a drive into a series of minor 50% levels at 4463.00, 4481.00 and 4491.00. These level will move lower throughout the session if the index continues to make new intraday lows.

Bearish Scenario

A sustained move under 4449.00 will signal the presence of sellers. This could lead to a test of 4439.50. Watch for a technical bounce on the first test of this level. If it fails then the Fibonacci level at 4416.00 will become the next downside target. Once again, look for buyers on a test of this level.

If 4416.00 is taken out with heavy selling pressure then look for an acceleration to the downside with 4339.75 the next major target.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for September 13, 2021

The Euro is under pressure on Monday after hitting its lowest level against the U.S. Dollar since August 27 earlier in the session. The dollar strengthened as market expectations build that the Federal Reserve could taper its stimulus sooner rather than later despite a surge in COVID-19 cases.

At 13:33 GMT, the EUR/USD is trading 1.1793, down 0.0018 or -0.15%.

The Wall Street Journal reported on Friday that Fed officials will seek to make an agreement to begin paring bond purchases in November.

In other news, a key market gauge of Euro Zone inflation expectations rose to its highest level since mid-2015 on Monday, a further sign that investor perceptions over the direction of future inflation are shifting.

Last week, the European Central Bank (ECB) said it would start to trim its own emergency bond purchases due to a sharp rise in Euro Zone inflation.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower.

A trade through 1.1664 will change the main trend to down. A move through 1.1909 will signal a resumption of the uptrend.

The minor trend is down. It changed to down earlier in the session when sellers took out the minor bottom at 1.1802. This shifted momentum to the downside.

The main range is 1.1603 to 1.1975. The EUR/USD is currently trading on the weak side of its retracement zone at 1.1820 to 1.1856, making it resistance.

The short-term range is 1.1664 to 1.1909. Its retracement zone at 1.1787 to 1.1758 is potential support. It stopped the selling earlier today at 1.1770.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Monday will be determined by trader reaction to the main 50% level at 1.1820.

Bearish Scenario

A sustained move under 1.1820 will indicate the presence of sellers. The first downside target is the short-term 50% level at 1.1787, followed by the intraday low at 1.1787.

If 1.1787 fails as support then look for the selling to possibly extend into the short-term Fibonacci level at 1.1758. This is a potential trigger point for an acceleration into the next major support at 1.1664.

Bullish Scenario

Overtaking 1.1820 will signal the return of buyers. If this move creates enough upside momentum then look for the buying to possibly extend into 1.1851 to 1.1856.

Side Notes

For day-traders, use the 50% level at 1.1787 as an intraday pivot.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Bullish Speculators Betting on Storm to Impact Production

Natural gas futures are trading higher early Monday, putting it within striking distance of last week’s high at $5.184. The market is being underpinned by worries over low production caused by the impact of Hurricane Ida and concerns over the possibility of inadequate storage levels ahead of the start of the winter heating season.

At 11:23 GMT, December natural gas futures are trading $5.158, up $0.91 or +1.80%.

Worries over a new storm brewing in the Gulf of Mexico could also be giving the market a boost. NatGasWeather noted Friday that “a new tropical disturbance will attempt to strengthen” in the far western Gulf of Mexico and then track toward the South Texas/Mexico border by Tuesday, “with heavy showers.” The system could force further delays in Gulf of Mexico production, the firm said.

Short-Term Weather Outlook

According to NatGasWeather for September 13-19, “The northern ½ of the U.S. will be comfortable with highs of 70s to 80s as weak cool fronts track through with showers. The southern ½ of the U.S. will be very warm to hot as high pressure rules with highs of upper 80s and 90s, including locally 100s in California and the Southwest.

Temperatures will cool across the Texas Coast as heavy rains and strong winds arrive as Tropical Storm Nicholas moves inland off the Gulf of Mexico on Tuesday – Friday.

Overall, national demand will be low across the northern U.S. but moderate to high across the southern U.S.

US Energy Information Administration Weekly Storage Report

The U.S. Energy Information Administration (EIA) reported on Thursday that domestic supplies of natural gas edged up by 52 billion cubic feet (Bcf) for the week ended September 3. That was much higher than most estimates. The five-year average increase was 65 Bcf.

Major surveys pointed toward a below-average build in the mid-20s Bcf. Injection estimates in a Bloomberg poll landed at a median of 39 Bcf. Predictions ranged from 32 Bcf to 58 Bcf. Results of a Reuters survey, meanwhile, ranged from injections of 32 Bcf to 51 Bcf, with a median build of 40 Bcf. Natural Gas Intelligence (NGI) estimated a 38 Bcf injection.

Total stocks now stand at 2.923 trillion cubic feet (TCF), down 592 Bcf from a year ago and 235 Bcf below the five-year average, the government said.

Daily Forecast

Lost production from Hurricane Ida combined with cooling-related demand has limited the U.S. ability to build up natural gas inventories. This should help sustain the current upside bias as we approach the winter heating season. Prices could get a further boost on Monday if Tropical Storm Nicholas heads toward production and refining facilities.

According to NatGasWeather, “Tropical Storm Nicholas will track along the Texas Coast the next several days with heavy rains, strong winds, and cooling.

The storm is expected to remain just below hurricane strength, but could impact Liquefied Natural Gas (LNG) feed gas, produce power outages, as well as decrease production along the U.S. Gulf Coast due to flooding rains.

Impacts from the storm will be closely watched, especially since production in the Gulf of Mexico has been slow to recover from Hurricane Ida that tracked through nearly two weeks ago, and where it remains down 1.2 Bcf still today.”

For a look at all of today’s economic events, check out our economic calendar.

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – First Target 34779, follwed by 34932

December E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market opening on Monday. The blue chip average is being helped by a recovery in shares of major component Apple Inc, which lead the plunge on Friday.

Investors could also be betting on relief from the recent surge in COVID-19 cases. According to the latest reports, the seven-day average of new U.S. COVID cases has fallen 27% from the recent September 2 peak, raising hopes that the Delta Variant Wave has crested.

At 10:52 GMT, December E-mini Dow Jones Industrial Average futures are trading 34718, up 227 or +0.66%.

During the premarket session, shares of Apple Inc are trading $150.40, up 1.43 or +0.96%. On Friday, the stock sold off sharply, dragging the Dow with it after a federal judge ruled that Apple must allow external payments for app developers such as Epic Games, creator of the popular online game Fortnite.

Daily December E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 34400 will reaffirm the downtrend. A move through 35383 will change the main trend to up.

The minor trend is also down. A trade through 35076 will change the minor trend to up. This will also shift momentum to the upside.

The main range is 33533 to 35429. Its retracement zone at 34481 to 34257 is the primary downside target. This zone also represent value. Buyers came in on Friday at 34481 to stop the four day price slide.

On the upside, the first target is the minor 50% level at 34779. This is followed by a minor retracement zone at 34932 to 35038.

Daily Swing Chart Technical Forecast

The direction of the December E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to 34481.

Bullish Scenario

A sustained move over 34481 will indicate the presence of buyers. If this move generates enough upside momentum then look for a rally into the minor pivot at 34779. Since the main trend is down, sellers could come in on a test of this level.

Overtaking 34779 will indicate the buying is getting stronger. This could trigger a surge into the next minor retracement zone at 34932 to 35038.00.

Bearish Scenario

A failure to overcome 34779 will signal the return of sellers. Taking out 34481 will indicate the selling pressure is getting stronger. This could lead to a quick test of the main bottom at 34400, followed by the main Fibonacci level at 34257.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – Treading Water with Major Players on Sidelines Ahead of CPI Report

Gold futures are inching higher on Monday while putting in a mixed performance as traders continue to hover around the key $1795.00 – $1800.00 technical levels. Trader reaction to this area will set the near-term tone in the market. At his time, the trade under $1795.00 suggests a downside bias is developing.

At 08:56 GMT, December Comex gold futures are trading $1792.30, up $0.20 or -0.01%.

Fundamentally, control of the direction of the market is in the hands of U.S. Treasury investors and U.S. Dollar traders.

Other than a report on the Federal Budget Balance at 18:00 on Monday, there are no major economic releases. Nonetheless, investors are already preparing for Tuesday’s major report on U.S. Consumer Prices. This report takes on added importance due to the higher-than-expected U.S. Producer Price Index report released on Friday.

A stronger-than-expected CPI report will raise the chances of an earlier-than-expected tapering by the Federal Reserve. This form of tightening would be bearish for gold prices especially if it drive interest rates and the U.S. Dollar higher.

Gold Traders Eyeing US Inflation Data for Clarity on Timing of Fed’s Tapering Plans

Data released Friday showed that producer prices rose 0.7% in August and 8.3% year over year, which was the biggest annual increase since records were first kept in November 2010.

The closely watched consumer price index will be released on Tuesday, at which point the Street will see how much of the heightened costs are being passed along to consumers. Economists surveyed by FactSet are expecting the reading to show that consumer prices jumped 5.3% on an annual pace in August.

“Supply bottlenecks, inventory shortages, higher commodity prices, and higher shipping rates have all contributed to higher input costs,” noted Charlie Ripley, senior investment strategist for Allianz Investment Management.

“Friday’s data on wholesale prices should be eye-opening for the Fed, as inflation pressures still don’t appear to be easing and will likely continue to be felt by the consumer in the coming months,” he added.

Daily Forecast

The key area to watch is $1795.00 to $1800.00. An upside bias could develop on a sustained move over $1800.00. The downside bias will continue on a sustained move under $1795.00.

Traders will continue to get their cues from the Treasury market and U.S. Dollar.

U.S. 10-year and 30-year Treasury yields fell slightly on Monday morning to start the week. This is helping to underpin prices.

Meanwhile, a stronger U.S. Dollar may be capping gains with investors wary of the Federal Reserve beginning its exit from support-supportive policy even as cases of the coronavirus surge.

The greenback closed out its best week in three weeks on Friday as it benefited from safety flows and the policy outlook lifting yields on U.S. Treasuries.

For a look at all of today’s economic events, check out our economic calendar.

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Counter-Trend Sellers Eyeing 15554.00 – 15589.00

December E-mini NASDAQ-100 Index futures are edging higher in the pre-market session on Monday, rebounding from an earlier setback as investors attempt to break a three-day losing streak.

At 08:19 GMT, December E-mini NASDAQ-100 Index futures are trading 15502.25, up 68.25 or +0.44%.

The technology index was pressured early in the session due to heavy losses seen in Asia trading on Monday, where Hong Kong’s Hang Seng Index dropped about 2% amid regulatory fears surrounding sectors such as financial technology and electric vehicles.

A sharp rise in producer prices helped drive the index lower on Friday. The news has traders bracing for Tuesday’s consumer price index report which will show Wall Street how the rise in producer costs are being passed on to consumers.

Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. The main trend will change to down on a trade through 14699.00. A move through 15702.25 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. The next downside target is the minor bottom at 15248.50.

The minor range is 15702.25 to 15405.75. Its retracement zone at 15554.00 to 15589.00 is the next upside target. Aggressive counter-trend sellers could come in on a test of this level. They are going to try to form a potentially bearish secondary lower top.

The short-term range is 14699.00 to 15702.25. If the selling pressure resumes on a trade through the intraday low at 15405.75 then its retracement zone at 15200.50 to 15082.25 will become the primarily downside target.

Daily Swing Chart Technical Forecast

The direction of the December E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to 15434.00.

Bullish Scenario

A sustained move over 15434.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into 15554.00 to 15589.00. Look for sellers on the first test of this area. Overtaking the Fibonacci level at 15589.00 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 15434.00 will signal the presence of sellers. The first downside target is the intraday low at 15405.75. This is a potential trigger point for an acceleration to the downside with the short-term retracement zone at 15200.50 to 15082.25 the next major downside target and value zone.

Look for buyers on the first test of 15200.50 to 15082.25.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Traders Awaiting Potential Oil Demand Revisions from IEA and OPEC

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Monday as energy companies continue to struggle with output halted after Hurricane Ida made landfall about two weeks ago. Stronger demand expectations are also providing support as well as worries about a new tropical storm brewing in the Gulf of Mexico.

At 07:07 GMT, December WTI crude oil futures are trading $69.55, up $0.42 or +0.61% and December Brent crude oil futures are at $72.66, up $0.40 or +0.55%.

Offshore Production Halted, but Refiners Coming Back

According to reports, about three-quarters of the offshore oil production in the U.S. Gulf of Mexico has been immobilized since late August. Meanwhile, U.S. refiners are coming back faster than oil production from the impact of Hurricane Ida, a reverse of past storm recoveries. Most of the nine Louisiana refineries impacted by the storm have restarted or were restarting on Friday.

“Hurricane Ida was unique in having a net bullish impact on U.S. and global oil balances – with the impact on demand smaller than on production,” Goldman Sachs analysts said in a note dated September 9.

Goldman estimated that the storm caused U.S. oil inventories to decline by about 30 million barrels and could push up U.S. refining margins and further widen the price spread between WTI and Brent.

US Rig Count Rises Despite Hurricane Ida:  Baker Hughes

Energy Services firm Baker Hughes reported that U.S. energy firms added oil and natural gas rigs for a fifth time in six weeks the week-ending September 10 as offshore oil units in the Gulf of Mexico slowly started to return after Hurricane Ida slammed into the coast.

The oil and gas rig count, an early indicator of future output, rose 6 to 503 in the week to September 10, Baker Hughes said. U.S. oil rigs rose 7 to 401 this week, while gas rigs fell 1 to 101. That puts the total oil rig count up 249 rigs, or 98%, over this time last year.

Major Players Increase Bullish Bets

Money managers raised their net long U.S. crude futures and options positions in the week to September 7, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Daily Forecast

Looking ahead, traders will have the opportunity to react to potential revisions to the oil demand outlook from the Organization of the Petroleum Operating Countries (OPEC) and the International Energy Agency (IEA) as coronavirus cases continued to rise. OPEC will likely revise its 2022 forecast lower on Monday, two people familiar with the matter said.

Over the short-run, crude oil prices are likely to show a slight upside bias until Gulf of Mexico oil production comes back to near full capacity. Right now, no one is sure when that will happen. Longer-term traders are awaiting clarification of the demand picture as rising coronavirus cases continue to dominate the news.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Momentum Trending Lower with .7292 – .7248 Next Major Target Zone

The Australian Dollar is under a little pressure against the U.S. Dollar early in the session on Monday as investors express caution ahead of a Reserve Bank of Australia speech and jobs data later in the week.

A strong U.S. Dollar is also weighing on the Aussie. The Greenback began picking up strength on Friday after a robust U.S. Producer Price Index (PPI) report encouraged investors to increase bets on an earlier-than-expected tapering by the Federal Reserve.

At 06:24 GMT, the AUD/USD is trading .7344, down 0.0010 or -0.13%.

The price action also suggests investors are pricing in a stronger-than-expected U.S. Consumer Price Index (CPI) report, due to be released on Tuesday.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7222 will change the main trend to down. A move through .7478 will signal a resumption of the uptrend.

The minor trend is down. It turned down earlier in the session when sellers took out last week’s low at .7347. This move shifted momentum to the downside. A trade through .7410 will change the minor trend to up.

The short-term range is .7222 to .7478. The AUD/USD is currency testing its retracement zone at .7350 to .7320.

The main range is .7106 to .7478. Its retracement zone at .7292 to .7248 is the next downside target zone and potential support area. It’s also the last support zone before the main bottom so look for buyers to come in to defend the uptrend.

The minor range is .7478 to .7336. Its retracement zone at .7407 to .7424 is the nearest upside target area.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .7350.

Bullish Scenario

A sustained move over .7350 will indicate the presence of buyers. This could lead to a labored rally with potential upside targets .7379, .7407, .7410 and .7424. The latter is a potential trigger point for an acceleration to the upside with .7478 the next likely upside target.

Bearish Scenario

A sustained move under .7350 will signal the presence of sellers. The next downside targets are layered at .7320, .7292 and .7248. The latter is the last potential support before the .7222 main bottom.

Taking out .7222 will change the main trend to down. This is also a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Weaker on Profit-Taking; Underpinned by Low Supply Concerns

Natural gas futures started slightly better on Friday but prices drifted lower throughout the session, leading to a technical closing price reversal top. There weren’t any major changes to the fundamentals so most traders chalked up the loss to profit-taking, following a nearly 50 cent rise over Wednesday and Thursday.

On Friday, December natural gas futures settled at $5.067, down $0.091 or -1.76%. This was down from an intraday high of $5.184.

Despite the small setback, the bullish tone remains fully entrenched with weak production due to the hurricane-related shut ins and lingering concerns over the tight storage balances ahead of the start of the winter heating season.

Production Update

According to the Bureau of Safety and Environmental Enforcement (BSEE), as of Friday, nearly three-quarters of the natural gas produced in the Gulf of Mexico, 1.68 Bcf/d, remained offline.

Based on data as of midday on Friday, 65 oil and gas production platforms still were unmanned, which was more than 11%, BSEE said. Personnel also had not been returned to three moored rigs, or 28% working in the offshore. In addition, two unmoored rigs, or 13%, remained off location from where they were positioned before the hurricane, Natural Gas Intelligence (NGI) reported.

NGI went on to say that output was already modest ahead of Ida, with production averaging about 92 Bcf/d over the summer months – below the levels prior to the coronavirus pandemic and roughly 1 Bcf/d below what many analysts have said is needed to align supply with demand before winter.

Strong LNG Demand, Low Stockpiles Equals Upward Pressure on Prices.

LNG exports continue to soak up excess supply and feed imbalance worries, NGI wrote. LNG feed gas volumes topped 11 Bcf on Friday – within striking distance of record levels.

“The major European indices hit post-2008 and then all-time highs multiple times throughout the summer – even surpassing Asian prices on a handful of days,” said RBN Energy LLC analyst Lindsay Schneider.

“At the same time, Asian prices have set all-time seasonal records and are now sitting just below the previous single-day high settle from this past January. Usually, as the weather cools heading into fall, so do prices, but that’s unlikely this year as the European gas storage inventory is at the lowest level for this time of year than we’ve seen in recent history, and the time to replenish stocks for the winter is rapidly running out.”

With output failing to stay astride because of lingering pandemic apprehension among oil producers, worries are mounting that underground stockpiles of gas needed to fuel heading needs during the winter season may fall short. This has placed upward pressure on prices, NGI wrote.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – Downside Bias Building as Bets on Early Fed Tapering Rise

Gold futures closed lower on Friday as investors continued to wait for clarity over the U.S. Federal Reserve’s tapering timeline.

Although most major investors are likely keeping their power dry ahead of the Fed’s September 21-22 policy meeting, we do know from the recent price action that they are aware of the importance of a pair of 50% levels at $1795.00 and $1800.00. These two prices are controlling the direction of the market.

On Friday, December Comex gold settled at $1792.10, down $7.90 or -0.44%.

The 50% level at $1795.00 represents half of the more than year-long range at $1460.30 to $2129.60. The 50% level at $1800.00 represents half of the short-term range at $1922.00 to $1677.90.

By continuing to straddle these two 50% levels or balance points, investors are telling us they are nearly neutral at this time ahead of the Fed’s tapering decision although the price action on Friday suggests they are leaning toward the bearish side.

Traders are leaning to the bearish side because monetary tightening is coming. Maybe not an interest rate hike but certainly a reduction of its massive amounts of stimulus.

The rallies we’ve seen in gold do not represent a long-term bullish outlook in my opinion. Most of the moves have been fueled by buy stops, position-adjusting and short-covering. Low volume is also one of the reasons for the lack of follow-through.

Shorts are covering at times because they believe the Fed will begin tapering, their timing has been off, however. So they are encouraged to adjust their bearish positions.

With the Fed planning on tapering, U.S. Treasury yields rising and the U.S. Dollar firm, it’s hard to build a bullish case for gold at this time.

Friday’s solid August Producer Price Index report, which exceeded expectations and hawkish from a Federal Reserve official were also behind the pressure on the dollar.

The benchmark U.S. 10-year Treasury yield rose on Friday after the PPI report indicated high inflation could persist for some time. While gold is considered a hedge against inflation, higher yields translate into higher opportunity cost for holding non-interest bearish bullion.

Gold investors will be closely monitoring the Fed’s decisions, since non-yielding bullion tends to gain when interest rates are low. But, Friday’s elevated U.S. PPI numbers seem to be driving gold investors to believe that the Fed could show slightly less accommodation down the road with tapering.

Gold prices could plunge over the near-term if the U.S. consumer inflation data exceeds expectations.

If you’re confused by the headlines then just watch the chart pattern. Look for a slight upside bias to form on a sustained move over $1800.00, and for the downside bias to continue on a sustained move under $1795.00.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Lower US Oil Production Continues to Underpin Prices

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures soared on Friday after traders shifted their focus back to the tighter supply situation. The growing signs of supply tightness in the United States as a result of Hurricane Ida more than offset the bearish influences of Saudi Arabia’s price cut to Asia and China’s releasing oil from its strategic petroleum reserve.

On Friday, December WTI crude oil settled at $69.13, up $1.52 or +2.25% and December Brent crude oil finished at $72.26, up $1.47 or +2.03%.

The oil market also got a boost from news of a call between U.S. President Joe Biden and his Chinese Counterpart Xi Jinping. The call raised hopes for warmer relations and more global trade, Reuters reported.

In other news, the United States added rigs in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks.

Over Two-Thirds of Offshore Oil Output Remains Shut in US Gulf – Regulator

U.S. offshore oil companies restored almost 200,000 barrels of production on Friday, while most of the Gulf Coast crude output remained offline following Hurricane Ida, government data showed.

The storm hit the U.S. Gulf of Mexico almost two weeks ago, damaging infrastructure and removing more than 21 million barrels of production from the market, Reuters reported.

Over two-thirds of the U.S. Gulf of Mexico’s oil production, or 1.2 million barrels per day, were still shut as repair efforts dragged on, helping to support global oil prices.

US Gulf Coast Oil Refiners Recovering Faster than Producers

Most of the nine Louisiana refineries shut by Hurricane Ida have restarted or were restarting on Friday, nearly two weeks after the powerful storm came ashore, a Reuters survey showed.

Refiners are coming back faster than oil production, a reverse of past storm recoveries. Just three of the nine refineries were completely idled, accounting for about 7% of Gulf Coast refining, compared to shut-ins of two-thirds of oil output.

US Gulf Coast Offshore Rigs Start to Return after Ida – Baker Hughes

U.S. energy firms this week added oil and natural gas rigs for a fifth time in six weeks as offshore oil units in the Gulf of Mexico slowly started to return after Hurricane Ida slammed into the coast.

This week, 4 offshore oil rigs returned in Louisiana, energy services firm Baker Hughes Co said in its closely followed report on Friday.

Last week, all offshore rigs operating in the Gulf of Mexico shut due to Ida. All of them were seeking oil and located off Louisiana.

Short-Term Outlook

Friday’s jump in prices suggests that traders are concerned over the speed of the production recovery in the Gulf of Mexico. This concern is likely to continue into next week. Conditions could improve rapidly next week as long as the weather cooperates, but we’re at the peak of hurricane season so anything can happen.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – Dollar/Yen Firms as Investors Bet on Early Fed Tapering

The Dollar/Yen closed higher on Friday, supported by a rise in U.S. Treasury yields as investors increased their bets on a sooner-than-expected Federal Reserve tapering, following the release of a solid producer price inflation report.

The spread between U.S. Government bond yields and Japanese Government bond yields widened, making the U.S. Dollar a more attractive asset. The spread widened after a government report on producer prices came in stronger-than-expected.

Gains were likely limited by a plunge in the U.S. stock market. This may have sent investors into the safety of the Japanese Yen.

On Friday, the USD/JPY settled at 109.912, up 0.179 or +0.16%.

10-Year Treasury Yield Advances as Producer Prices Rise More than Expected

U.S. Treasury yields rose Friday morning as the producer price index showed that parts of the U.S. economy are still contending with inflation.

The yields on the benchmark 10-year Treasury note added 3.9 basis points, climbing to 1.339%. The yield on the 30-year Treasury bond rose by 3.5 basis points to 1.934%.

US Producer Prices Beat Consensus Estimate

The U.S. Producer Price Index rose 0.7% in August, above the consensus estimate of 0.6%. The reading marked a slowdown from the 1% gain in wholesale prices in July but the index is now up 8.3% year over year, the largest increase since at least 2010.

Fed’s Mester Says She Would Still Like to Begin Taper This Year

Cleveland Federal Reserve Bank President Loretta Mester said on Friday that she would still like the central bank to begin tapering asset purchases this year, joining the chorus of policymakers making it clear that their plans to begin scaling back support were not derailed by weaker jobs growth in August.

“I don’t think the August employment report has changed my view that we’ve made substantial further progress” on both inflation and employment, Mester told reporters.

The Fed’s policy-setting committee will have to decide on the best way to move forward and there may be different views on what the “precise timing” of taper should be, Mester said.

But Mester said she would be comfortable with starting the taper this year and winding down the purchases over the first half of next year, repeating views she shared in late August.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Daily Forecast – Fed Tapering Fears Help Erase Early Gains

The Australian and New Zealand Dollars finished mixed on Friday. After giving back earlier gains, the Aussie closed lower while the Kiwi managed to post a slight advance.

Improved risk sentiment helped boost the currencies for most of the session but conditions changed following the release of a stronger-than-expected U.S. Producer Price Index report. The PPI’s solid gain in August indicated that high inflation is likely to persist for a while. This drove Treasury yields higher as well as the U.S. Dollar as investors increased bets on a Federal Reserve tapering announcement at its September 21-22 policy meeting.

On Friday, the AUD/USD settled at .7354, down 0.0016 or -0.21% and the NZD/USD finished at .7115, up 0.0005 or +0.07%.

Early Strength Fades

The AUD/USD and NZD/USD were trading higher earlier Friday as traders tried to recapture some of its weekly loss. The strength was supported by a jump in riskier assets as investors reacted to the news that U.S. President Joe Biden had a wide-ranging call with his Chinese counterpart Xi Jinping on Thursday. The news raised hopes that the simmering tensions between the two super powers would ease.

Bullish traders were also betting that rapid progress on coronavirus vaccinations domestically would help stimulate the economic rebound in coming months. While Australia is still reporting rising coronavirus cases, the share of the population vaccinated has also picked up markedly and should surpass that in the United States in the coming weeks, Reuters reported.

Meanwhile much of New Zealand, barring the city of Auckland, has already seen an easing of stay-at home rules and the government has been seeking extra shots from abroad.

The bullish news was offset during the U.S. session when robust producer inflation raised concerns that the Federal Reserve would have to begin reining in its massive stimulus sooner-than-expected.

US Dollar, Treasury Yields Jump on Fed Tapering Bets

U.S. producer prices increased solidly in August, leading to the biggest annual gain in nearly 11 years, suggesting that high inflation is likely to persist for a while as the unrelenting COVID-19 pandemic continues to pressure supply chains.

The producer price index for final demand rose 0.7% last month after two straight monthly increases of 1.0%, the Labor Department said. The gain was led by a 0.7% advance in services following a 1.1% jump in July.

The Aussie and Kiwi were also pressured by a rebound in the U.S. Dollar. The greenback rose after Cleveland Fed President Loretta Mester said on Friday that she would still like the central bank to begin tapering asset purchases this year, joining the chorus of policymakers making it clear that their plans to begin scaling back support were not derailed by weaker jobs growth in August, Reuters reported.

For a look at all of today’s economic events, check out our economic calendar.