Price of Gold Fundamental Daily Forecast – Struggling Against Firm US Dollar

Gold futures are trading flat early Tuesday after posting a technical reversal the previous session following a test of its lowest level since August 11. With the trend down, the price action probably reflected short-covering and position-squaring since the bearish traders have to get out of the way before the real buyers can gain control. In other words, gold went up because weak short decided to bailout, not because of the presence of strong buyers.

At 03:13 GMT, December Comex gold traders are trading $1763.90, up $0.10 or +0.01%.

Monday’s short-covering rally was likely fueled by a dip in Treasury yields and some hedge buying tied to the steep sell-off in the global equity markets. The strong U.S. Dollar likely put a lid on the rally.

Gold did not go up because it is a safe-have asset. Gold is an investment, not a safe-haven. That’s old school thinking. The true safe-havens are U.S. Treasurys, the U.S. Dollar and the Japanese Yen. When there’s trouble like potential contagion from the financial turmoil coming out of China, investors want safety and liquidity. To some, gold is a safe-haven, but the liquidity can’t compare to the Treasury and foreign currency markets.

A few weeks ago I read some analysis on FXEmpire.com where a fellow was saying gold would rally during an upcoming stock market crash. On September 2, the benchmark S&P 500 Index hit an all-time high of 4545.85. On September 20, it reached a low of 4305.91. This is a 5.28% loss. On September 3, December Comex gold hit a high of $1836.90. On September 20, it hit a low of $1742.30. This is a 5.15% loss. So if you do the math, gold has outperformed the S&P 500 Index since September 3.

I’m being sarcastic, of course. My point is, the direction of gold is controlled by interest rates and at time the U.S. Dollar. Gold tends to react to stock market crashes when the Federal Reserve floods the financial system with massive amounts of liquidity. I don’t they’re going to do that now just one-day before the start of a two-day meeting where they will be discussing whether to begin pulling liquidity out of the market.

So if gold rallies from current price levels, the move will likely be fueled by short-covering and position-squaring. If the stock market drops another 5 to 10% over a short period of time, the Fed may have to do something, but they don’t have a lot of tools left in their toolbox with interest rates already sitting near zero.

The chances of a powerful gold rally are slim because I don’t think the Fed will lower rates because they can’t and I don’t think they are going to increase their bond purchases to provide more liquidity because they are close to reducing their massive stimulus program. At best, the Fed will leave its bond purchases at current price levels and take a pass on tapering until later in the year when the stock market could be more stable.

Even if gold does pop to the upside, it’s likely to be another shorting opportunity.

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

USD/JPY Fundamental Daily Forecast – More Downside Pressure Likely as Financial Markets Remain Unsettled

The Dollar/Yen is trading higher on Tuesday after posting a sharp sell-off the previous session due the safe-haven buying of the Japanese Yen. The Forex pair is being supported early in today’s session by a technical bounce in global equity markets and slight rise in U.S. Treasury yields. Despite the rebound, traders remain cautious due to contagion fears in the Asia-Pacific region and general uncertainty ahead of the start of the Federal Reserve’s two-day meeting on Tuesday.

At 01:40 GMT, the USD/JPY is trading 109.552, up 0.172 or +0.16%. This is up from Monday’s low at 103.324.

Safe-Haven Buying Drives Demand for Japanese Yen

The USD/JPY retreated on Monday as worries about the fallout from property developer Evergrande’s solvency issues spooked financial markets and lifted safe-haven currencies like the Japanese Yen.

Market sentiment is being rattled by the potential contagion from Evergrande, which is trying to raise funds to pay a host of lenders, suppliers and investors. A deadline for an $83.5 million interest payment on one of its bonds is due on Thursday, and the company has $305 billion in liabilities.

Evergrande’s woes worsened on Monday after warnings from Chinese regulators that the company’s insolvency could fuel broader risks in the country’s financial system if not stabilized.

Fed Meeting on the Radar

Ahead of Monday’s turmoil, the U.S. Dollar had been pushing higher against the Japanese Yen and a basket of other major currencies on expectations the Federal Reserve will begin reducing its monthly bond purchases this year, with the central bank’s policy announcement due on Wednesday.

Daily Forecast

Despite the early strength, the USD/JPY could still face some downside pressure because the financial markets remain unsettled. Some traders are getting their first taste of a classic flight to safety move into the U.S. Dollar and the Japanese Yen until we get some sense of clarity on whether or not Evergrande’s assets will be liquidated in an orderly fashion or just dumped on the open market.

Australia, for example, is facing huge risks because Evergrande is one of the major property owners in the country. Evergrande is expected to be forced to liquidate large amounts of property to fulfil their debt obligations and that will really hurt property and property-related commodities and stocks.

Global debt and equity markets are especially at risk. If they continue to tumble then investors will flock to the Japanese Yen for protection.

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

AUD/USD and NZD/USD Fundamental Daily Forecast – RBA Minutes to Take Backset to Evergrande Contagion Fears

The Australian Dollar is edging higher against the U.S. Dollar early Tuesday, shortly ahead of the release of the Reserve Bank of Australia’s (RBA) policy meeting minutes at 01:30 GMT. The Aussie was under pressure the previous session as a stronger U.S. Dollar weighed down commodities and commodity-linked currencies. The catalyst behind the selling pressure was a looming catastrophe at indebted property giant China Evergrande.

At 0:55 GMT, the AUD/USD is trading .7254, up 0.0001 or +0.02%.

Aussie traders are extremely nervous because Evergrande is one of the major property owners in Australia. A forced liquidation of those properties to fulfil their debt obligations will put tremendous pressure on property and property-related stocks. It could also hurt the mortgage market and may even force the RBA to delay any tightening of policy. New liquidity from the central bank could become an option if the situation gets worse enough. All of these factors could weigh on the Australian Dollar.

RBA Minutes to Provide Little Help if Focus Remains on Threat of Evergrande Contagion

The RBA will on Tuesday release the minutes from its monetary policy meeting on September 7.  At the meeting, the RBA kept its key interest rate unchanged at a record low 0.10 percent and confirmed to taper its bond purchases.

AUD/USD traders seemed to have been slightly caught off guard by the RBA’s decision to taper its bond purchases at the policy meeting.

Although initially the Aussie Dollar jumped, it reversed course soon after. The Aussie spiked about 0.3 percent after the meeting but went on to trade 0.3 percent lower than before the RBA’s meeting.

After the policy announcement, a high-ranking RBA official said he expects the economy to “bounce back” from virus lockdowns as vaccination rates rise and as governments ease health restrictions, giving the central bank confidence to begin dialing back its $200 billion bond-buying stimulus.

RBA Governor Philip Lowe said after the bank’s monthly board meeting on Tuesday the lockdowns in NSW and Victoria would “delay”, but “not derail”, the economic recovery.

Dr. Lowe admitted there was uncertainty about the timing and pace of the bounce-back, and it was likely to be slower than earlier in the year.

“Much will depend on the health situation and the easing of restrictions on activity.”

Daily Forecast

Everything the RBA has to say in its minutes is expected to be downplayed due to the financial ramifications from the widely expected Evergrande property liquidation in Australia and the lingering impact of the move.

No one is certain how this situation will play out so there is no strong incentive to buy the AUD/USD at this time especially before the start of the Federal Reserve’s two-day meeting on Tuesday.

Traders are bracing for contagion and fallout from the Evergrande problem so rallies are likely to be sold until there is more clarity.

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

USD/CAD Exchange Rate Prediction – The Dollar Rise on Risk-off Trade

 

The dollar surged higher and hit key resistance levels as Canada went to the polls on Monday.  Riskier assets headed south which has benefited the greenback as a safe-haven currency. Prime Minister Trudeau and his Conservative challenger O’Toole appear to be running neck and neck.

Technical Analysis

The dollar moved higher against the Loonie, as the safe-haven lure of the greenback pushed the U.S. currency higher against most major currencies. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910. Support on the exchange rate is seen near the 10-day moving average at 1.2690 and the 50-day moving average at 1.2600. The exchange rate is overbought as the fast stochastic is printing a reading of 81, above the overbought trigger level of 80, which could foreshadow a correction. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

The Debt Ceiling Generates Risk

Congress has been stalling any movement related to future spending despite urging from Treasury Secretary Yellen to act.  There are rumors that The House of Representation may take up a stop-gap measure to extend expenditures, but this attempted will have difficulty in the Senate.

Silver Price Prediction – Prices Test Key Support as Prices are Oversold

Silver prices moved lower but bounced off key support levels despite a rally in the dollar. The rise of the greenback on Monday generated headwinds for silver prices as risk-off speed accelerates. U.S. Yields moved. Gold prices have failed to become the security of choice during a risk-off period, edged slightly higher, which helped buoy silver.

[fx-broker slug=fxtm]

Technical analysis

Silver prices continued to trend lower but held key support levels seen near the August and December lows at 21.95. If prices are able to close above this level for consecutive days it will likely generate a bounce Prices remained below resistance seen near the 10-day moving average, at 23.51. Target support is seen near the August lows at 22.10. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 9, below the oversold trigger level of 20, which could foreshadow a correction.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Debt Ceiling is not Under Control

The risk-off trade accelerated, continuing the trend experienced at the end of last week.  Congress has been stalling despite urging from Treasury Secretary Yellen to act.  There are rumors that The House of Representation may take up a stop-gap measure to extend spending, but this attempted will have difficulty in the Senate.

Keysight Stock Attracts Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Keysight has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the stock is trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares for years.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals KEYS has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Chart, histogram

Description automatically generated

Source: www.mapsignals.com

In 2021, the stock has attracted 17 Big Money buy signals and zero sell signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 1-year outperformance vs. VanEck Semiconductor ETF (+33.83% vs. SMH)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Keysight has been growing revenues and earnings rapidly. Take a look:

  • 3-year sales growth rate (+10.21%)
  • 3-year earnings growth rate (+110.51%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, Keysight has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock saw buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

KEYS has a lot of qualities that are attracting Big Money. And since it first appeared on this report back on 1/15/2019, it’s up 162%. The blue bars below show the times that Keysight was a top pick:

Chart, histogram

Description automatically generated

Source: www.mapsignals.com

It’s been an all-star stock for years according to the MAPsignals process. I wouldn’t be surprised if KEYS makes additional appearances in the years to come. Let’s tie this all together.

Keysight continues to fire on all cylinders technically alongside growing sales and earnings. I like the long-term story of the stock.

The Bottom Line

The Keysight rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no position in KEYS at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Natural Gas Price Prediction – Prices Slide Through Support as Supply Increases

Natural gas prices moved lower on Monday as fear of tropical storm activity abated.  The weather is expected to be warmer than normal over the next 6-10 days, but then becomes milder, according to a forecast from the National Oceanic Atmospheric Administration. The most recent report from the EIA showed a larger than expected build in natural gas inventories, but stocks remain well below the 5-year average. U.S. Supply increased in the latest week.

Technical Analysis

On Monday, natural gas prices dropped sharply, falling 2.75% and gapping lower through key support, which is now resistant near the 10-day moving average at 5.08. Support is seen near the 50-day moving average at 4.23. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. Medium-term positive momentum is decelerating as the MACD (moving average converge divergence) histogram is printing in negative territory with a declining trajectory which points to consolidation.

Supply Increases

U.S. supply increases as production begins to come back online in the Gulf of Mexico. According to data from the EIA, the average total supply of natural gas rose by 1.7% compared with the previous report week. Dry natural gas production grew by 1.4%, or 1.3 Bcf per day, compared with the previous report week. According to daily reports from BSEE, on a weekly basis, natural gas production outages in the Federal Offshore Gulf of Mexico decreased by about 0.6 Bcf per day this report week compared with the last report.

Gold Price Prediction – Prices Experience Dead-Cat Bounce

Gold prices traded sideways and continued to experience a dead-cat bounce. The upward momentum was drained by the selloff last week. The rally in the dollar on Monday generated headwinds for gold prices as risk-off speed accelerates. U.S. Yields moved lower as the safety of U.S. treasury bonds lured traders. Gold prices have failed to become the security of choice during a risk-off period. The U.S. debt ceiling is approaching, which means that Congress needs to extend spending, or the government will shut down.

[fx-broker slug=fxtm]

Technical analysis

Gold prices consolidated and continue to form a bear flag pattern. This scenario is a continuation pattern that pauses before it refreshes lower. Generally, the recovery from a sharp selloff is muted forming a dead-cat bounce before prices start to move lower again. Prices remained below resistance seen near the 10-day moving average, at 1,782. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 17, below the oversold trigger level of 20, which could foreshadow a correction.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

USD/CAD Daily Forecast – Canadian Dollar Is Under Pressure At The Start Of The Week

U.S. Dollar Gains Ground Against Canadian Dollar

USD/CAD made an attempt to settle above the resistance at 1.2900 but lost momentum and declined towards 1.2830 while the U.S. dollar lost momentum against a broad basket of currencies.

The U.S. Dollar Index faced strong resistance at 93.40 and declined towards 93.20. The nearest support level for the U.S. Dollar Index is located at 93.10. In case the U.S. Dollar Index declines below this level, it will head towards the support at 92.80 which will be bearish for USD/CAD.

While it’s an Election Day in Canada, foreign exchange market traders focused on general market sentiment and dynamics of commodity markets which were under pressure on fears about financial problems of China’s Evergrande.

U.S. dollar was gaining ground against a broad basket of currencies as demand for safe-haven assets increased. However, traders were not ready to push the U.S. currency towards yearly highs as they remained cautious ahead of the Fed meeting.

Meanwhile, Canadian dollar was under pressure as WTI oil made an attempt to settle below the psychologically important $70 level. If WTI oil settles below this level, it will head towards the 50 EMA at 69.40 which will be bearish for commodity-related currencies, including Canadian dollar.

Technical Analysis

usd cad september 20 2021

USD to CAD is currently trying to settle back above 1.2830. RSI is close to the overbought territory, but there is enough room to gain upside momentum in case the right catalysts emerge.

In case USD to CAD manages to settle above 1.2830, it will head towards the next resistance level at 1.2850. A successful test of this level will open the way to the test of the resistance at 1.2865. If USD to CAD gets above 1.2865, it will head towards the next resistance at 1.2900.

On the support side, a move below 1.2830 will push USD to CAD towards the support at 1.2785. In case USD to CAD declines below 1.2785, it will head towards the support at 1.2760. A move below 1.2760 will open the way to the test of the support at 1.2730.

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

Natural Gas Price Fundamental Daily Forecast – Weaker on Forecasts Calling for Lower Cooling Demand

Natural gas futures are edging higher at the mid-session after clawing back earlier losses. The market was under pressure on the opening after weather-driven demand eased over the weekend. Bespoke Weather Services reported declines in both projected cooling degree days (CDD) and heating degree days (HDD).

At 15:22 GMT, December natural gas futures are trading $5.297, up $0.039 or +0.74%.

Natural Gas Intelligence (NGI) reported that liquefied natural gas (LNG) feed gas flows were down 0.5 Bcf/d early Monday amid planned maintenance at the Cove Point LNG facility in Maryland, analysts at EBW Analytics Group said.

Short-Term Weather Outlook

According to NatGasWeather for September 20-26, “A weather system with showers and thunderstorms will exit the Northwest and track across the Midwest/Great Lakes mid-week, then stall over the Ohio/Valley and East late in the week. Highs with this system will be mild to nice with highs of 60s to 70s, locally upper-50s.

The nation’s strongest demand will be from California to Texas as high pressure brings hot highs of 90s to near 100F. National demand will drop to very light levels late this week and next weekend as highs of upper 60s to 80s rules most of the U.S. and with very little coverage of 90s. Overall, national demand will be moderate Monday, then low-very low after.”

Early Peek at Thursday’s EIA Storage Report

Thursday’s U.S. Energy Information Administration storage report is expected to come in slightly above historical norms. NGI’s model is calling for an 82 Bcf injection into natural gas stocks for the week-ended September 17.

Last year, the EIA recorded a 70 Bcf injection for the similar week, and the five-year average injection is 74 Bcf.

Daily Forecast

The daily chart indicates December natural gas futures are getting close to shifting momentum to the downside. We expect to see one more rally to test the resistance at $5.79. Our first objective is $5.434.

If sellers come in at $5.434 then look for new pressure to drive the market into at least $4.867 to $4.649.

“Weather-driven demand for natural gas could slip as cooling demand halves by Thursday, however, while shut-in Gulf of Mexico supply trickles back and technical analysis suggests deeper tests of support,” the EBW team said. “Continued price weakness may be likely later this week.”

Bespoke Weather Services added, “At some point, one would think our prices here in the U.S. can move according to changes in fundamentals and soon enough, changes in weather forecasts.”

“At this stage, we are at a point where we will need some cold in winter to justify current prices, but it remains early to focus on weather, especially with our market just blindly following trends in European prices.”

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

USD/CAD: Loonie Hits Over One-Month Low on Subdued Oil Prices, Election Uncertainties

The Canadian dollar hit over a one-month low against its U.S. counterpart, sliding for the third straight day on Monday as falling energy prices and snap election uncertainties weighed on the commodity currency.

The USD/CAD pair rose to 1.2895 today, up from Friday’s close of 1.2766. The Canadian dollar lost over 1.2% last month and further depreciated over 1.5% so far this month.

Today’s federal reserve decision and the election in Canada will be closely watched by investors. There is no sign of a majority in the Canadian election on Monday, a second time in a row, leaving either Justin Trudeau or Erin O’Toole trying to govern with a minority.

Investors are concerned that elections will lead to a deadlock that hinders government action against COVID-19 and impedes the recovery of the economy.

“What we think will matter the most from a market perspective is whether there will eventually be a workable majority. Up until some majority emerges, the Canadian dollar may continue to discount political uncertainty,” noted Francesco Pesole, FX Strategist at ING.

“At the same time, barring the worst-case scenario of a hung parliament and new elections, we still expect a gradual dissipation of political risk in the coming weeks to help CAD close its mis-valuation gap (USD/CAD is 2% overvalued, according to our short-term fair value model) as the loonie may start to benefit more freely from its good fundamentals – and above all, the prospect of more BoC policy normalisation. We still expect USD/CAD to trade below 1.25 in 4Q21.”

Canada is the world’s fourth-largest exporter of oil, which edge lower as production in the Gulf of Mexico slowly returns. U.S. West Texas Intermediate (WTI) crude futures were trading 1.38% lower at $70.99 a barrel. Lower oil prices lead to lower U.S. dollar earnings for Canadian exporters, resulting in a decreased value of the loonie.

“We don’t think the federal election is weighing on the CAD in any significant way.  In fact, while the CAD has fallen against the USD this week, it has lost less ground than most of its G10 currency peers.  Short-term CAD vols have firmed but remain within this year’s range (1w vol peaked at 9% in February),” noted Shaun Osborne, Chief FX Strategist at Scotiabank.

“The election race remains tight, and another minority government remains the most likely outcome.  Research by our Scotia Economics colleagues suggests that there is ultimately very little difference in the fiscal outcomes through 2025 between either the Liberal or Conservative parties’ platforms.  Either way, a minority will limit the next government’s room for significant manoeuvre.”

The dollar index, which measures the value of the dollar against six foreign currencies, was trading 0.01% higher at 93.204. The dollar reaches a one-month high, boosted by recent strong economic data and speculation regarding Fed tapering. Fed policymakers will meet this week and open discussions about reducing their monthly bond purchases are expected.

It is highly likely that the world’s dominant reserve currency, the USD, will rise by end of the year, largely due to the expectation of two rate hikes by the Fed in 2023. With the dollar strengthening and a possibility that the Federal Reserve will raise interest rates earlier than expected, the USD/CAD pair may experience a rise.

Why Twitter Stock Is Under Pressure Today

Twitter Agrees To Pay $809.5 Million To Settle Class Action Lawsuit

Shares of Twitter found themselves under pressure after the company announced that it had entered into a binding agreement to settle class action securities lawsuit for $809.5 million. This lawsuit commenced back in 2016. The copmany stated that it settled the lawsuit “without any admission, concession or finding of any fault, liability or wrongdoing”.

According to the press release, Twitter intends to use cash on the balance sheet to pay $809.5 million. This amount is expected to be paid in the fourth quarter of 2021. Twitter finished the previous quarter with more than $4 billion of cash on the balance sheet, so the settlement will not have a serious impact on the company’s liquidity.

What’s Next For Twitter Stock?

With a market capitalization that is close to $50 billion and more than $4 billion of cash on the balance sheet, Twitter can easily deal with a $809.5 million hit. At this point, current valuation valuation levels and general market sentiment present bigger risks for Twitter stock.

Analysts expect that Twitter will report earnings of $0.9 per share in 2021 and $1.2 per share in 2021, so the stock is trading at roughly 50 forward P/E. Analyst estimates have started to move lower in recent weeks, which may serve as an additional bearish catalyst for Twitter.

It remains to be seen whether Twitter will be able to trade at 50 forward P/E in case general market pullback continues and investors start to pay more attention to valuation levels. In this environment, it may be hard to justify paying 50 times future earnings for an established company in the digital space. At the same time, many traders may be ready to buy stocks after notable pullbacks, and Twitter shares have already declined from the $73 level in July to $60.

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

Silver Price Daily Forecast – Silver Tries To Rebound As Demand For Safe-Haven Assets Increases

Support At $22.10 Stays Strong

Silver is currently trying to settle back above $22.30 while U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 93.40 but failed to develop sufficient upside momentum and pulled back towards 93.30. In case the U.S. Dollar Index gets above 93.40, it will head towards yearly highs near 93.75 which will be bearish for silver and gold price today.

Meanwhile, gold continues its attempts to settle back above $1750. Today, gold benefits from increased demand for safe-haven assets amid global market sell-off. Treasury yields have moved lower as traders rushed to buy U.S. government bonds, providing additional support to gold. In case gold manages to settle above $1750, it will move towards the resistance level at $1775 which will be bullish for silver.

Gold/silver ratio managed to settle above 78.50 and is moving towards the 79 level. Gold/silver ratio gained strong upside momentum, and RSI moved into the overbought territory. However, there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If gold/silver ratio gets to the test of the 79 level, silver will find itself under more pressure.

Technical Analysis

silver september 20 2021

Silver tried to settle below the support level at $22.10 but lost momentum and moved back above $22.30. If silver settles above this level, it will move towards the resistance at $22.60.

A successful test of the resistance at $22.60 will push silver towards the next resistance level which is located at $22.90. If silver gets above $22.90, it will head towards the resistance at $23.20.

On the support side, silver needs to get back below $22.30 to have a chance to develop downside momentum in the near term. The next support level for silver is located near the recent lows at $22.10.

A move below $22.10 will open the way to the test of the support at $21.90. If silver manages to settle below this level, it will head towards the support at $21.65.

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

Price of Gold Fundamental Daily Forecast – Weak Recovery as Investors Rush into Other Safe-Haven Assets

Gold futures are edging higher on Monday after recovering from earlier weakness. The rebound in prices is being fueled by hedge buyers and a drop in Treasury yields, but gains are likely being capped by a stronger U.S. Dollar. The catalyst behind the selling is a sell-off in the global equity markets on fear of contagion due to financial market turmoil in China.

At 13:14 GMT, December Comex gold futures are trading $1759.10, up $7.70 or +0.44%.

Gold prices hit their lowest level since August 11 early Monday after safe-haven buying spiked the U.S. Dollar higher against a basket of major currencies. The move came as investors were monitoring events in the Asia-Pacific region particularly in China and Hong Kong. Meanwhile, investors were also on edge ahead of this week’s two-day Federal Reserve monetary policy meeting that could offer clues on when the central bank will start tapering its pandemic-era stimulus.

The gold market turned around and began to mount a recovery as global equity markets plunged. Investors began buying sovereign debt for protection, namely, U.S. Treasury notes and bonds. The move drove down Treasury yields, helping to support gold prices. Safe-havens like the Japanese Yen and U.S. Dollar were also in high demand.

What’s Shaking Up the Global Financial Markets?

A number of factors are driving investors out of riskier assets and into the traditional safe-havens – Treasury notes, Japanese Yen and U.S. Dollar. Gold is benefiting from the drop in yields but also from the plunge in the global equity markets.

Stock traders essentially need some place to park their profits so gold is in some ways benefitting from this. Liquidity is a major factor and gold isn’t as liquid as the three other safe-havens. Gold appears to be taking on more of a hedging role today. Traders may be buying gold as a hedge against a further decline in stocks.

The primary cause of the market turmoil on Monday is a steep drop in stocks in Hong Kong with shares of embattled Chinese developer China Evergrande Group to blame for the move. Hong Kong’s Hang Seng Index dropped 3.3% to close at 23,099.14. Shares of China Evergrande Group in the city plummeted 10.24%, after failing as much as 17% earlier.

Daily Forecast

December Comex gold futures are finding support inside a key technical area at $1757.40 to $1738.60.

The sell-off in the stock market and weaker Treasury yields could offer some relief for the beat-up asset which has fallen nearly $100 since September 3. However, we expect the selling to resume once the smoke clears.

In order to have a major rally in gold, the central banks would have to pump more liquidity into the financial markets, but that is not likely unless there is a 5-10% correction in the stock market. Although such a move is on the central bankers’ check list, most are worried about withdrawing stimulus from their economies than putting liquidity back in.

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

Pfizer Close to Long-Term Buying Opportunity

Pfizer Inc. (PFE) and BioNTech SE (BNTX) released positive data on their COVID-19 vaccine for ages 5 to 11 on Monday but the stock is losing ground with the broad market, adding to a five-week slide that’s already relinquished more than 16%.  The decline is roughly tracking the slow rollover of U.S. Delta infections and another slowdown in daily vaccinations. Last week’s FDA advisory meeting didn’t help, with the group declining to recommend broad-based booster shots.

Pulling Back from August Breakout

The pharmaceutical giant has gained 17% so far in 2021 despite the latest downturn, with a good portion of selling pressure generated by a rotation out of pandemic plays. However, the last six months have proved how difficult it will be to transition from pandemic to endemic, especially with billions around the world still unvaccinated. Taken together with Pfizer’s bullish breakout pattern, the current decline should offer a low risk buying opportunity.

Approval for ages 5 to 11 will open eligibility to more than 50 million new vaccinations in the EU and USA. As the business partners noted on Monday, “Pfizer and BioNTech plan to share these data with the FDA, European Medicines Agency (EMA) and other regulators as soon as possible. For the United States, the companies expect to include the data in a near-term submission for Emergency Use Authorization (EUA) as they continue to accumulate the safety and efficacy data required to file for full FDA approval in this age group.”

Wall Street and Technical Outlook

Wall Street consensus is surprisingly lukewarm, with a ‘Hold’ rating based upon 4 ‘Buy’, 15 ‘Hold’, and 1 ‘Underweight’ recommendation. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $39 to a Street-high $61 while the stock is set to open Monday’s session on top of the median $44 target. While this placement indicates that Pfizer is fairly-valued, it’s also likely that analysts are underestimating the vaccine’s long-term revenue potential.

Pfizer topped out at 44.05 in 2018 and sold off to a six-year low during 2020’s pandemic decline. A volatile recovery finally reached the prior peak in August 2021, setting off an immediate breakout that posted an all-time high at 51.86 less than three weeks later. The pullback into September is now approaching a zone of strong support near 40, raising odds for a buy-the-dip wave that confirms the breakout and sets the stage for strong 2022 upside.

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

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Oil Price Fundamental Daily Forecast – Outside Factors Encouraging Long Liquidation, Profit-Taking

U.S. West Texas Intermediate and International-benchmark Brent crude oil futures are trading lower early Monday, extending Friday’s losses amid a jump in the U.S. Dollar to a three-week high against a basket of major currencies and a potential increase in U.S. supply after a reported rise in the U.S. rig count.

At 11:11 GMT, December WTI crude oil is trading $69.96, down $1.42 or -1.99% and December Brent crude oil is at $73.33, down $1.23 or -1/65%.

Crude Pressured as US Dollar Catches Safety Bid

Dollar-denominated crude oil is getting hit by a sharply higher U.S. Dollar on Monday. The movement is being fueled by overseas activity in Asia. The offshore Chinese Yuan fell to a three-week low dragging commodities lower, while the safe-haven U.S. Dollar rose as worries about Chinese property developer Evergrande’s solvency spooked financial markets.

The drop in the Yuan came on the back of warnings from Chinese regulators that the Evergrande’s insolvency could spark broader risks in the country’s financial system if not stabilized.

Evergrande has been scrambling to raise funds to pay its many lenders, suppliers and investors. A deadline for the company to make an interest payment to creditors looms this week.

US Margin Call Selling Weighing on Crude Prices

U.S. stock futures began the week deeply in the red as investors continued to move to the sidelines in September amid several emerging risks for the market including the fear of contagion in the financial markets following the troubled China property market, an upcoming Federal Reserve meeting, Rising US. COVID cases, debt ceiling negotiations and a new tax bill.

The steep sell-off in stocks is likely triggering a series of margin calls which are forcing hedge funds to sell other assets like crude oil to raise the cash to meet their margin obligations. So far the selling in crude has been relatively light but could increase after the New York futures market opening.

Fear of Increased Supply

U.S. energy firms last week added oil and natural gas rigs for a second week in a row although the number of offshore units in the Gulf of Mexico remained unchanged after Hurricane Ida slammed into the coast over two weeks ago.

Fourteen offshore Gulf of Mexico rigs shut two weeks ago due to Ida remained inactive, energy services firm Baker Hughes Co said in its closely followed report on Friday. Last week, four of those offshore rigs returned to service. The oil and gas rig count, an early indicator of future output, rose nine to 512 in the week to September 17, its highest since April 2020, Baker Hughes said.

Daily Forecast

WTI and Brent crude oil futures are going through normal corrections with traders looking for a pullback into a value area after the market got a little overvalued last week. Long liquidation to meet margin calls in the stock market, fear of increased supply from the recovery in the Gulf and good old-fashioned profit-taking are behind the weakness. The longer-term supply/demand fundamentals remain intact. Prices are just cheaper than they were last week.

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

Daily Gold News: Monday, Sep. 20 – Gold Going Sideways Despite Stock Market’s Rout

The gold futures contract lost 0.30% on Friday, as it fluctuated following Thursday’s decline of 2.12%. On Thursday, it broke below the recent local lows as series of the U.S. economic data releases along with the rallying U.S. dollar led to a sell-off in precious metals. The yellow metal came back to $1,750 price level. This morning the market is extending a short-term consolidation along that support level, as we can see on the daily chart (the chart includes today’s intraday data):

Today gold is 0.2% higher, as it is trading slightly above $1,750 price level. What about the other precious metals? Silver is 0.1% lower, platinum is 1.8% lower and palladium is 3.0% higher. So precious metals’ prices are mixed this morning.

Friday’s Consumer Sentiment release has been slightly worse than expected at 71.0. Today we will get the NAHB Housing Market Index release at 10:00 a.m. But the markets will be waiting for Wednesday’s FOMC Monetary Policy Statement release.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Monday, September 20

  • 10:00 a.m. U.S. – NAHB Housing Market Index
  • All Day, Canada – Federal Election
  • All Day, China – Bank Holiday

Tuesday, September 21

  • 8:30 a.m. U.S. – Housing Starts, Building Permits, Current Account
  • Tentative, Japan – Monetary Policy Statement, BOJ Policy Rate

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Commodity Supercycle Sets New Record Highs – Where Next For Prices?

Commodities are currently on an unstoppable run with everything from the metals, energies to agriculture markets setting new record highs as the supercycle firmly gathers pace.

Last week, a wide number of commodities blasted through all-time highs.

Aluminium prices soared to 13-year highs. Nickel prices hit 7-year highs and Uranium prices surged to 9-year highs – surpassing a record 6-year high, set only a week ago.

The bullish momentum also split over into other commodities with Natural Gas rallying to a 7-year high. Sugar prices hitting 4-year highs and Lithium prices climbing to an all-time record high.

In total 27 Commodities ranging from the metals, energies to soft commodities have tallied up double to triple digit gains within the in the past year.

Uranium, Natural Gas and Lithium prices are up 219%, 240% and 215%, respectively.

But the best performing commodity, so far this year, is Crude Oil.

Crude Oil prices have quadrupled this year and are setting new record highs almost every month. Crude Oil prices are currently up over 287% from their 2020 lows.

There are plenty of reasons why commodities are on the move, but the key driver is rapidly surging global inflation, tightening supply, logistical bottlenecks and booming demand across many highly essential commodities as a result of the COVID-19 pandemic.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

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

Dogecoin Tests Support At $0.2190 While Bitcoin Slips Below $45,000

Crypto Markets Are Moving Lower

Dogecoin managed to settle below the support at $0.2255 and is trying to settle below the next support at $0.2190 while Bitcoin is moving towards the important support level at $44,000.

The world’s leading cryptocurrency found itself under strong pressure at the start of the week which was bearish for altcoins. Ethereum is moving towards the 50 EMA at $3,070. XRP is trying to settle below the major support at $0.95, while Shiba Inu tests its 50 EMA at $0.00000735.

In case Bitcoin manages to settle below the support at $44,000, it will gain additional downside momentum and move towards the support which is located near September lows at $42,600, which will be bearish for the whole crypto market and may put significant pressure on Dogecoin.

It should be noted that Bitcoin Dominance, which measures the market capitalization of Bitcoin as a percentage of total crypto market capitalization, is currently trying to settle above 42.5%. This move shows that pressure on altcoins is growing, which is bearish for Dogecoin.

Technical Analysis

dogecoin september 20 2021

Dogecoin is currently testing the support level at $0.2190. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

In case Dogecoin manages to settle below $0.2190, it will head towards the next support level which is located at September lows at $0.2130. A successful test of this level will open the way to the test of the support at $0.2050. If Dogecoin declines below $0.2050, it will move towards the psychologically important support level at $0.20.

On the upside, Dogecoin needs to settle back above $0.2190 to have a chance to develop upside momentum in the near term. The next resistance level is located at $0.2255. A move above this level will push Dogecoin towards the resistance at $0.23. If Dogecoin settles above the resistance at $0.23, it will head towards the next resistance level which is located at $0.2350.

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

EUR/USD Daily Forecast – Euro Remains Under Pressure Against U.S. Dollar

Euro Is Weak At The Start Of The Week

EUR/USD is currently trying to settle below the support at 1.1720 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index gained strong upside momentum and is testing the resistance level at 93.40. In case this test is successful, the U.S. Dollar Index will move towards yearly highs near 93.75 which will be bearish for EUR/USD.

The economic calendar is empty today so foreign exchange market traders will focus on general market sentiment. Global markets are losing ground, and there are several reasons for this move.

First, markets are worried about the fate of China’s Evergrande, whose financial problems may have broader impact. Second, traders remain cautious ahead of the Fed Interest Rate Decision which will be released on September 22. It remains to be seen whether Fed is ready to announce the reduction of its asset purchase program, but markets look very nervous ahead of the important meeting.

Technical Analysis

eur usd september 20 2021

EUR/USD settled below the support at 1.1750 and is trying to settle below the next support level at 1.1720. In case this attempt is successful, EUR/USD will move towards the support at 1.1690.

A successful test of the support at 1.1690 will open the way to the test of the next support level which is located near yearly lows at 1.1660. In case EUR/USD declines below this level, it will head towards the support at 1.1630. A move below this level will push EUR/USD towards the next support at 1.1615.

On the upside, EUR/USD needs to get back above 1.1720 to have a chance to develop upside momentum in the near term. The next resistance level for EUR/USD is located at 1.1750.

If EUR/USD gets above 1.1750, it will move towards the next resistance at 1.1775. A successful test of this level will open the way to the test of the resistance which is located at the 20 EMA at 1.1785.

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