GOLD Back Above $2,000

Okay, very good morning to you. It is Tuesday the 18th of August. Hope you're doing well. Don't forget to check out amplifiedtrading.com, our website, if you haven't already done so. For any of those interested in trading, we've got our next 1-week intensive advanced program happening starting on Monday. And then we've got our professional program also starting on the same time, which is a 5-week program where you actually get to trade our capital as well as part of that process. So check it out if you haven't already done so. And don't forget to like and subscribe to the channel. Really appreciate some of the comments from yesterday. And of course, I'm always happy to help whenever I can. But just having a look then at the charts, and this morning as I was going through quite a lot of the news, I would say Things were pretty quiet overall. There wasn't a great deal that was really getting me excited from a news perspective, but certainly there are some interesting things to watch. And, and a lot of that is coming from some key technical levels. US indices back within striking distance of, of all-time highs, of course. And then you've got gold back above $2,000, oil as well flirting back with some interesting topside levels as it continues to be underpinned a little bit from yesterday, uh, the idea that China is really ramping up its pre-ordering, if you like, of the transportation of future purchases of energy products in the US. But also as well, a lot of people looking ahead to the, the JMMC meeting and some reports overnight about the fact that compliance levels are looking particularly good, which would be great for oil in terms of helping to offset some of the revision downwards that we've seen from a number of bodies last week on the demand side. And then in the currency market, I really wanted to have a look at the dollar again. I started off this week really talking about it in the title of the briefing on Monday about is it make or break week for the dollar. And if anything, after that episode of kind of yield short-term obsession, the market now has reverted back to trend. Yields are declining again, that meaning gold's moving back up again, dollar's moving back down again, currency pairs right back at striking distance. Euro on that long-term key trend line, as is the Aussie dollar. So we'll have a look at that as well. But look, let's get into some of the charts and let's start with gold because it's always a good talking point. And going to remove my camera just so you can see everything a bit more clearly. So you're here looking at the gold chart on the 30-minute candlestick, just to give us a perspective of really the last 3 weeks, I guess, of price activity, where we were finding some restriction around that 2000 level. As you can see here on the left-hand side, hit that level, rejected a couple times. The pullbacks were getting ever more shallow, which would be indicative then of an impending break, of which when came, you can see, caused a quite quick acceleration of price And then we went all the way up to a high which was just short really of around 2,100. We had the breakdown in price of which we now know, and obviously a number of factors behind that. But as I said, now that that yield story has kind of passed for the moment, this is one of the things that we were saying at the time when gold was declining, and that was the fact that yes, despite that move that had happened and for good reasons. The idea here is that gold is going to be underpinned and supported going forward in the weeks and months ahead through into Q3 and Q4, whether or not it's the Federal Reserve continuing to sound, you know, an ultra-accommodative mode. You know, they are committed to unlimited quantitative easing. We've got the minutes coming out, and obviously a lot of people looking about any changes in some new policy tweaks going forward. I don't think that's going to happen necessarily in the minutes, but we've got the September meeting, which is quite key. You've got Jackson Hole happening, the symposium, at the end of the month. And the idea here is that there's enough geopolitical risk with US-China, uh, still to play out and potentially to get even more hostile as we go into the campaign, real period ahead of the election in November. And then also you've got the election in itself, which is looking likely, given the coronavirus situation, to be a mail-in ballot system, which inevitably is going to lead to massive disruption for the way of which results are going to be known. And that's being reflected in some of the hedging that's happening at the moment as well. So plenty to be bullish about gold irrespective of that incredible sell-off that we had obviously just a week ago or so. And so here we are, we are back above now that key psychological level again. So $2,000, you know, interesting. Yesterday we had this, this kind of breakout of what was— I just put an ellipse, you know, it's been— whenever they have an asset like this which is quite momentum-based, when it does start to move, similar with silver, they do tend to react really nicely to, to technical levels because a lot of these intraday short-term speculators are wanting to get in and out of the market. They're not looking here to hold a longer-term position. They just want to find the nearest and clearest way of proactively managing the trade, looking to get in and get out. And as we saw yesterday, a breakthrough then, that level of around 1975, really accelerated the price. And where did they, the bulls, chase it up to? Well, right up to literally pretty much to the cent, $2,000, uh, and then that's it, book profits. So completely behavioral there and technical in terms of the way in which that moved, because as soon as we hit $2,000 as the kind of ultimate objective on the run high yesterday, where we did move— if you think about it, right from the beginning of the day, we're talking about a $40 move. So pretty punchy as well on that side, getting overextended, technical level $2,000, what better target than to book some? And then as soon as it hits it, it drops $12 pretty much within the following hour. We have though, you know, despite that, obviously we're on the recovery now, and we're right here, we're at the 618 fib retracement of the initial high in gold all the way to the, the route low that we had on the 12th. So that's providing a little bit of near-term resistance. But yeah, further to the upside then, I've got to start looking, just kind of following the price back high. You've got the R1 on the daily pivots, which we're coming at around 2016-17. And then just using this, the previous structure of the price and how it responded on the previous highs and support on the lows. So if we're looking around here, 26-27 can be interesting, and then further up 36. 45, and so on. So yeah, at the moment then, as what we were on the desk largely anticipating, the sell-off in gold's been decidedly short-lived as the market reverts back to trend. And what does trend mean? Well, let me just show you the Dixie, because for all the same reasons I was just mentioning, particularly on the Fed side, the expectation then with a fairly slow and kind of grounded out recovery in the US economy is going to require ongoing support in that, in that sense from a monetary policy perspective. I was just looking at the, the Dixie, and you can see here this morning the Dixie's trading down about a quarter of 1%. But look where we are. The blue line is indicative of the current price, so 92,618. And if you actually look here, you've got that peak that we had back in I mean, this is going— we're going pretty far back here. We're talking 2003, uh, support, 2004 resistance with a double top there. You can see in 2004 and 2005, so '03, '04, '05, where we are right now was a really key level, uh, which was around, I guess, 93, but just below there, literally to where we are, 92.5, 92.60. You can see there the market responded to it as well back in the summer of 2015, again in early kind of Q2 of 2016, and chopped through. And you can see the failed break in the Dixie back in 2017, but then when it did break at the end of that year, we saw a much deeper move from really around 92.5 all the way down then to 88.5, which then starts to encapsulate some of the peaks of that price-dollar recovery in '08 and '09, 2010. So I do think it is a critical moment really for the dollar. And, and overall, although these are important support areas, I do think that ultimately I think there's enough in play to suggest the potential for that break to happen and a continuation of dollar weakness. And of course If that does happen, then things like the euro dollar— or let me just— I don't think I was showing my, my Dixie chart there. So if I— let me just make sure I was showing the Dixie here. So this is where we are at the moment. You can see that blue line. Here are those levels I was just referring to: 0.3, 0.4, and 0.5. These areas here where the price responded to before, and that previous break around this current area saw back 2 years ago, quite a deep run in the dollar. So the point being is we're at a key area here for, for the greenback. And when I start looking at EURUSD, obviously a decent push on the upside yesterday. If we start looking at a multi-year chart, we're right back up there retesting the summer 2018 high. We've had a few failed attempts here, uh, looking week to week. We're right back at that level now. And obviously if we put that on an even longer time frame And this is not just critical on that previous chart for the summer of 2018, this also corresponds with that long-term trend line going back to 2008 and retest in 2014. So really quite key here because we've mentioned many times from a, from a timing perspective, we've obviously got the European PMIs coming out on Friday, could be quite interesting. Perhaps that we have to wait to the end of the week to provide that catalyst. But a break here technically does open up the potential for quite sharp upside in the euro. Then on the Aussie, if I just bring that in as well, it's a similar type of thing. The Aussie is right up here now following suit. So all of these dollar pairs— you did have the RBA minutes overnight, but you know, that's not really the driving force at the moment in these currency-dollar related pairs. It is the greenback that's dictating direction. And overnight we've had a little retest up at around a similar type of level on this, this trend line. And that trend line is basically this, which is that 2014 retest, 2018, and where we are at the moment, the one that we were looking at yesterday. So again, a really key level, all determined really not so much by, by the Aussie short term, but much more by the, the dollar And the dollar is sitting at these fairly precarious levels where I do think it is open to the prospects of potentially re-weakening aggressively and further. So yeah, it's going to be interesting to see how, how that plays out for sure. And today's session, uh, definitely it does need to be, to be watched. A quick look elsewhere, a few other things I, I just wanted to mention was let's just have a look at the oil market. This is on Reuters this morning talking about oil lower. Suppliers seek to hold promises on output cuts Obviously it comes a day ahead of the JMMC meeting. As I mentioned, this report suggests, according to two OPEC+ sources, that compliance with OPEC+ oil output cuts was seen at 97% in July. Now I know that's not perfect, but that's a damn sight higher than OPEC's pretty poor reputation to adhere to a predefined quota. So that I would say is a kind of positive sign. And with oil markets, just having a look at this as well this morning. So let me just transition my chart again. So just going to move the screen. So yeah, a couple of things I'm looking at here in the oil market. This is looking on a 30-minute. So a couple of areas where kind of rising trend line here from price from going back to middle of last week or early last week where it's just restricting price, and it did respect that yesterday evening. And then going back to the fourth, um, kind of an area here where price has just been squeezing up. But in the near term, I guess if we're looking more relatable for the current price activity, I'd be keeping an eye on— if I put this rectangle here, that previous push higher that we had yesterday afternoon before the eventual break came into the US session. So after Europe had left, then we've come back down in the Asia-Pacific session and European morning to find support at the same exact area. So 4290 quite key in the near term in that respect. Any break below there, then be looking— you've got the pivot just underneath, of course, which does coincide quite close proximity to that initial high that we've seen at the overnight on the 14th, and then any further push down towards the low that we had yesterday afternoon. So a couple things to watch there in the near term. But obviously on a longer-dated chart on oil, if I just remove— tidy this up one second. So here, that 21 DMA, as we were discussing on Monday, um, it's not 21. Yeah, 21 DMA. The 50 DMA is the red line, so the blue line, the 21, has been holding up quite nicely and has continued to do so both on Friday and even yesterday. It got, I mean, not that close, but it's still been a pretty solid indicator. And for the moment then, looking to retarget up and around those initial highs we had on the 5th, definitely within sight. We're right at the top end of the range that we've traded basically so far in the last 7 days or so. So worth keeping an eye there. Um, on the, the factor of charts though, let's just have a quick look at a couple of US indices because the NASDAQ continuing to do its thing. I mean, I read this morning as well, not that it's particularly related, but Tesla now market cap in the US is the, the 10th largest company in the United States of America, which is just incredible. Um, but yeah, I was looking at the, the NASDAQ. The NASDAQ's been doing that same pattern really as what we saw initially back down here. Yeah, I remember when we were at 10,296, it kind of test, test, break. And then we're here, we were test, test, test, break. And we're doing the same thing again now. So, you know, if history does repeat itself, then perhaps then we can get a further squeeze on the upside here. Um, but struggling a little bit, you could say, to really just power on up. Although I still feel quite bullish, and any pullbacks, uh, got quite a key level there, 11,058. And then you've got that bottom end of that trend line and the 21 DMA, which has also been particularly strong in the NASDAQ over a period of time. It would be good areas to reinsert along even if we did see a pullback. But there's still a lot of indecision at the moment on Capitol Hill. I'm not sure if you guys have been reading the latest, but latest on that is basically, uh, the Senate Republicans plan to introduce now a scaled-back stimulus bill according to two Senate Republican aides. The legislation would include a $300 a week enhanced employment benefit. So that number now is coming down. Remember, it was around $400 down from the previous $600 that was in play before its expiration at the end of July. It's also going to include money for small business aid, additional U.S. Postal Service funding, and protection from employers against lawsuits stemming from COVID-19 infections. Democratic support, though, is seen as unlikely. The Senate is in recess at the moment, so it's probably unlikely that Mitch McConnell is going to even bother calling them back for this. Um, and the proposal could be the last kind of tabled offer now until then, given the fact that they normally go on to an extended break, which the Senate is already on, until they return in September. So we could have— not only have we had basically like a 2-week impasse here of what exactly are they going to do with this latest stimulus bill, which is quite key for the ongoing recovery of the US, of course, it could be another 2 weeks before they then come back from their kind of summer break, uh, in that sense. So the thing, the point here of what they've done is, it's kind of, as it says, it's a slimmed-down, scaled-back proposal. House Speaker Pelosi and the Senate Democratic leader Chuck Schumer have offered to trim their proposal by $1 trillion. Remember, they stood at $3.5 trillion, so they've come down to $2.5 But with the Republicans tabling what they have, for me, this entire thing is just dead on arrival. It's a no-go. And yeah, the markets are not freaked out by this, um, but it's looking likely from a timing perspective we might have to wait a number of weeks, in fact, for something to happen. The fact that the market hasn't really reacted so much, I think, tells quite a lot with how they deem that issue, that I still feel most are of the opinion that something will happen eventually, and perhaps then that's just enough then to go through this kind of toing and froing, knowing that generally some of the economic data points in the US have been pretty good, and the economy— well, not the economy, the market is holding up. So therefore, what's the rush at this point? Obviously they're playing quite a high-stakes game here, but If I was a politician, I'd probably be doing the same if I was thinking tactically in that way. So yeah, I wouldn't be expecting too much. I don't expect any type of progression with what the Republicans have put forward here, um, yesterday. But just so you're aware, the S&P of course as well, uh, with the NASDAQ pushing it around these all-time highs, the S&P is right back up there again. Of course, here it is. So we're just within striking distance really now. We've only got another 20 points or so to go and we're right back up to where we were back at the peak on the 20th of Feb. So the kind of inevitability about that continues to play out. Okay, one of the things though, just talking about the Republicans, and I just briefly wanted to mention then the polls. Obviously the Democratic convention is now underway. Lots of pop shots, even Michelle Obama getting involved talking about how unfit Donald Trump is to run as president. Definitely focusing on the COVID-19 situation and its impact that it's had on the US economy has been the main targeted kind of theme thus far. Interestingly though, in the polls, it's worth keeping an eye on, they haven't really fluctuated too much as yet, but but it'll be interesting to see where we stand at the end of the week after the convention is finished. Um, in little over a week, um, we've gone from around a 6.4 lead to Biden back up and re-widening to 7.7 since the appointment of the running mate Kamala Harris, and also probably now a little further extension, um, given the amount of volume of press coverage that this event's likely to draw for them. So Yeah, quite interesting to see how far it re-widens at this point in time. Separately, although everything I've mentioned is relatively upbeat, you know, kind of oil is up, equities are still holding up at this point, the one thing I did want to mention was COVID-19 and a few areas I'm still keeping an eye on. And before I look at this one, just really looking at mainland Europe, I know Spain was definitely a focal point a about 3 or 4 weeks ago, and that's kind of dropped off a little bit as they've started to get a little bit back into control of that latest acceleration in cases that they were seeing. But yeah, looking at the 7-day rolling average of new cases per million, of new confirmed cases of COVID-19, and as you can see, the US is basically plateaued and if anything gradually decelerating. But Spain, UK, Germany, And Italy's still on the up at the moment. And one of the ones that caught my eye this morning is that Germany has recorded its highest number of new coronavirus cases in nearly 4 months. The reproductive rate now above 1, which we know is quite critical. So I don't think this is a reason to spook markets right now. If it were, that would already be materializing. So I think the price movement in itself is, is the context enough that you need. But what I am saying is that this does definitely, you know, coronavirus is not like a done deal at this point, although the market I think is comfortable with the developments that this is showing worldwide at the moment. And hence the reason why, if anything, it's almost like a perfect cocktail where, um, for an equity long environment, um, where it's going to keep monetary policy in very much easing mode the economy is going to have that ongoing commitment. And generally then, some of the data has been suggestive that things have started to actually pick up again. So yeah, just worth keeping an eye on, that's all I would say. Okay, calendar-wise for today, what have we got? We had the RBA minutes overnight, uh, not really necessary for me to speak a great deal about it. Summary was the August meeting stated that accommodative approach would be maintained for as long as necessary, and a 3-year yield target would be maintained until there is progress towards full employment and inflation. So on those metrics, then they're going to remain in accommodative, accommodative mode for a long period of time. And that's kind of the whole point. That's the whole point as well, in my mind, that's helping this yield continuation, and we've got over that episode of movement that we had last week when obviously the 10-year did break out to the downside through some key technical levels of what was resistance and then support. And now we're on the move back higher again. And again, in the short term, just looking at the last couple of days' price activity, had a nice response yesterday evening and around the 50 DMA, and that has held a couple times overnight in the Asia-Pacific session. And so we're back up to that kind of range high, encapsulating some of the price activity from yesterday in the US 10-year now. But back to the calendar, the— apart from that then, today is particularly quiet in terms of UK and mainland Europe. Nothing in fact scheduled from a data perspective. Housing data coming out of the US, starts and permits, and then the weekly inventory data from the API this evening. Earnings-wise, this kind of like bookends earnings season. You get the brick-and-mortar kind of retail names, so Walmart and Home Depot reporting. Dow components, so worth keeping an eye on if you're looking at the futures market ahead of the cash open. And then for any fixed, fixed income traders, uh, gilt, so UK supply, and also 4 billion euros worth of a 2027 auction coming out of the German Treasury as well. But that is it. So, uh, wish you all the best for the session, and any questions at all, just feel free to leave a comment. Always happy to help. But I'll see you same time tomorrow. Thanks very much, guys.