4 out of 4 Success Model
My model for predicting the World Cup winner with 4 out of 4 success so far. Watch.
Gold & Rate Hike Update
Gold traders must keep an eye on bond market expectations for interest rate hikes. Yes rate hikes. The graphs below show rate hike probabilities for July (while) and September (green), with the latter currently 68% probability for a 25-bp rate hike. See how gold fell and DXY rose when the probability graphs rose. The weaker than expected US jobs report on Thursday triggered a temporary rally in gold and decline in rate hike probabilities, but markets are now repricing probabilities. DXY remains above the 100-week MA, while gold is unable to regain the 55-week MA.
Gold Never did 8
Will gold prices do something they never did before? Friday will be key. Watch now.
Next Gold Move
This chart of the USDX index shows an important breakout is afoot. If this breakout proves valid and continues ahead, it may present some challenges for XAUUSD by means of key resistance near 4240/45. Any decline below 4165/70 is likely to find subsequent support around 4115/20. Nonetheless, the DXY chart below may not only suggest selling pressure will re-emerge --likely near 4240, but could re-intensify selling towards a break of 4100. Im such intermarket tehnical dynamics, such bullishness in DXY could mean repeated failed buying for XAUUSD, rather than outright violent sell-offs in the yellow metal.
Gold and December Hike
Wednesday's FOMC release of the dot plot and Warsh press conference pushed bond market to price rate higher probabilities for a 25-bp rate hike in September and a full chance of a similar rate hike in October. Note how the white and green graphs have moved from below zero (yellow circle) to above above zero, shifting from rate cut to rate hike expectations. The green graphs shows 0.86%, implying an 86% probability of a quarter point hike in September, accompanied by a rise in DXY and decline in gold. The 2nd chart highlights the importance of the June 15th gap, whose floor stands at 4245/6, presenting a solid short-term support, which held successfully yesterday.
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