The Safe Haven Wind Down | Bulletin
As investors turn risk-on equities this week, both Gold and Silver experienced a significant sell off, based on news that the US may remove tariffs on China. This led to US Stocks recording new all-time highs, with the Dow Jones up over 2.3% this week and a safe-haven trade wind down, as Gold and Silver slumped 2.3% and 5.2%, respectively.
This news has still not been confirmed by US Trade authorities, however we could continue to see speculation drive markets for today’s trading.
Gold and Silver, now trade at key support levels, wicking to the October 1st low of $1,460 per ounce, with buyers looking for an opportunity to “buy the dip” or look for shorter-term reversals. The chart below shows several ranges that Gold has formed over the last few months, and investors will be looking for this to remain consistent barring any other stimulus news, with bulls looking to potentially target a retracement towards the $1,475 mark.
GBP/USD Stuck at 1.28 Handle
The Bank of England gathered yesterday as two MPC members voted for an interest-rate cut, which weighed on GBP bulls, who are still fighting to hold up the 1.28 level. The pair reached fresh two-week lows, with bears now looking to breach the 1.28 handle. See chart below.
BOE Governor Mark Carney, in the post meeting conference, said that risks to UK growth remain skewed to the downside, suggesting the BOE could eventually shift towards a cut, with a view of supporting the economy during a potential downturn.
Other Important Events
►The RBA, who held interest rates, said that Australia is slowly coming out of a slow patch, with record rates at all-time lows, the Aussie Dollar aims to breach the 70 cent mark against the US Dollar.
► US Stocks continue to trade at all-time highs and Trump is very happy, however on the Corporate side, there are key Tech earnings coming out soon which could change the momentum shift
When we start earning money, we’re drilled to do two things. Save, and Invest. We associate “spending” money on things we do not generally need as not responsible. However, when do we stop that cycle of saving and investing?
The Euro against the US Dollar is approaching 1.165 – a historically busy support/resistance area.
Traders and investors in the past couple of months have seen an 11% appreciation in the Euro. From a country’s viewpoint, an appreciating currency is seen as bad as it makes the countries (in the case, the continents’) exports more expensive for other countries. This is incredibly tough on German and French car automakers, as it means their cars would be more costly to sell overseas. On the contrary, this makes importing goods from other places cheaper.
Similarly to the United States, New Zealand has its elections coming up in 25 days. What’s the future of the New Zealand dollar once a party is enacted?
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