Market Signals Most Active Stocks within the Gold Sector

Gold Performance

On Wednesday, June 29, 2016, Gold prices rose as continued concerns over Britain leaving the European Union sent investors into safe-haven investing mode. Gold also benefitted from the declining U.S Dollar. The precious metal for August delivery settled up 0.7% at $1,326.90 a troy ounce on the Comex division of the New York Mercantile Exchange. In the medium term, gold is expected to remain strong under the unlikelihood that the Fed will raise rates in the coming meetings.

Most Active - Barrick Gold

On Wednesday, shares in The Barrick Gold Corp. recorded heavy trading volume of 24.45 million shares, higher than its three months average volume of 19.24 million shares. Barrick Gold's shares ended the trading session at $20.77, up 0.68% from its previous closing price. The stock moved between an intraday range of $20.74 and $21.35. Shares of the company are up 23.85% in the last one month and 182.18% on YTD basis. The company's stock is trading 13.29% above its 50-day moving average and 75.76% above its 200-day moving average.

Most Active - Yamana Gold

Shares of Yamana Gold, Inc. finished Wednesday's trading session 5.67% up at $5.22. A total of 12.99 million shares were traded, which was below its three months average volume of 15.74 million shares. The stock moved between $5.04 and $5.30 during the session. Over the last one month and the last three months, Yamana's shares have increased 25.00% and 71.88%, respectively. Since the beginning of 2016, the company's stock has advanced 181.41%. The company's shares are trading 11.97% above its 50-day average and 80.51% above its 200-day moving average.

Most Active - Gold Fields

On Wednesday, shares in Gold Fields Ltd. oscillated between an intra low of $4.62 and a session high of $4.96 before ending the day at $4.91, up 10.84%. Gold fields' shares recorded a trading volume of 8.14 million shares, which was above its three months average volume of 6.38 million shares. Shares of GFI have increased 24.62% in the last three months and 77.86% on YTD basis. The stock is trading 17.57% above its 50-day moving average; while it is 42.85% above its 200-day moving averages.

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Copper Rises to Eight-Week High in Bet on Post-Brexit Stimulus

Copper touched an eight-week high amid bets that central banks will move further to shore up economies following the U.K. referendum, boosting the outlook for demand.

Global equities advanced and the dollar weakened on signals that governments including Japan and South Korea will act to cushion the impact from the U.K.’s vote to leave the European Union. Federal Reserve Governor Jerome Powell said Brexit concerns may merit a reassessment of monetary policy.

“The market is clearly benefiting from a trifecta of Asian accommodation -- Korea, China and Japan -- and the Federal Reserve is going on vacation until 2018,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “So these accommodative measures have turned the tide for copper and brought it some support.”

Copper futures for September delivery gained 0.5 percent to settle at $2.186 a pound at 1:09 p.m. on the Comex in New York. The metal touched $2.1915, the highest since May 4.

On the London Metal Exchange, copper, zinc, aluminum, lead, nickel and tin advanced

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GLOBAL EQUITY, CURRENCY RECOVERY ENDS GOLD SURGE

Gold futures edged lower Tuesday in the US due to a return in investor optimism, although ongoing market uncertainty capped the losses. Gold for August delivery on the Comex division of the New York Mercantile Exchange was last down $7.10 or 0.5 percent at $1,317.60 per ounce. Trade has ranged from $1,308.20 to $1,329.50.

The yellow metal has benefitted from a massive flight-to-safety following the UK Brexit referendum but today investors locked-in profits.

“With Brexit now a reality the market seems to be calming down from its recent turmoil,” George Gero of RBC Wealth Managament said. “The FTSE and sterling are higher giving indications the panic has receded. This does not mean things will get better but it does mean what will happen will do so in a slower fashion.”

European equity markets recovered today with the FTSE 100 and Stoxx Europe 600 each rising 2.6 percent. Notably, the pound bounced-back after trading at the lowest level in over three decades.

In US markets, the Dow Jones industrial average and S&P increased 0.9 percent and 1.1 percent respectively, while the dollar softened 0.2 percent to $1.1049 against the euro. Overnight, holdings in the exchange-traded funds tracked by FastMarkets surged 14.32 tonnes to 1,996 tonnes, the highest since July 22, 2013. Investors have been attracted due to gold’s safe-haven characteristics to protect their portfolios against volatile market conditions.

Yesterday, European Central Bank president Mario Draghi did not mention the UK’s decision to exit the single market but called for greater policy coordination between world’s economies to combat slow growth and persistently weak inflation

The Brexit vote triggered a major capital exit from the economic bloc, with European banking stocks falling nearly 25 percent at one point – the biggest downturn since the 2012 sovereign debt crisis.

 In data, US final GDP quarter-over-quarter in the first quarter came in at 1.1 percent gain, a touch above the 1.0 percent forecast. Final GDP price index over the same period edged up 0.4 percent, missing expectations of a 0.6 percent gain.

The S&P/CS composite-20 HPI for April increased 5.4 percent, a touch below the 5.5 percent economic consensus.Lastly, CB consumer confidence for June bested expectations at 98, while Richmond manufacturing index in June stood at -7, missing the estimate of 2.

As for other precious metals, Comex silver for July settlement ticked up 9.1 cents or 0.5 percent to $17.835 per ounce. Trade has ranged from $17.550 to $17.880.Platinum for July delivery declined 40 cents or 0.1 percent to $978.80 per ounce while the most-actively traded palladium contract stood at $570.05 per ounce, up $12.65 or 2.3 percent.

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Aftermath from Brexit Continues with Sterling Down Nearly 4 percent

Worries over the aftermath of Britain’s decision to quit the European Union continued to influence the financial markets on Monday. Stocks continued to slide as investors reacted to another drop in the British Pound. Gold and other safe haven markets benefited from another round of fear-induced buying.

The GBP/USD hit 1.3151, its lowest level in 31 years. Based on the price action and the aggressive selling, some traders and analysts are predicting the slide will continue. Today’s low marked an 11.5 percent decline from the British Pound’s closing level on June 23.
The Forex pair was down 3.6 percent at 1.3189, despite efforts by British Finance Minister George Osborne to assure the UK citizens that the economy was in good shape and that the government and Bank of England could implement further actions if needed.
The fallout from the referendum and how it would affect the European economy also pressured the Euro which remained weak. The EUR/USD was last down about 0.80 percent at 1.1008. This is up slightly from its session low at 1.0970.
Safe-haven buying helped drive the Japanese Yen higher, though expectations that the Bank of Japan could intervene to halt the currency’s rise limited its advance. The USD/JPY was last trading at 101.673, down 0.470 or -0.46%. The EUR/JPY was down 1.540 at 111.926.
Overnight, Japanese Prime Minister Shinzo Abe said at an emergency meeting between the government and the Bank of Japan that he has instructed Finance Minister Taro Aso to watch currency markets “ever more closely” and take steps if necessary.
August Comex Gold posted a modest gain on Monday, hovering near its more than two-year high reached on Friday as uncertainty over Britain’s vote to leave the European Union encouraged investors to sell equities and seek safer assets.
Holdings in SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, jumped 2 percent to 934.31 tonnes on Friday, the highest since July 2013.
China’s gold imports via the main conduit Hong Kong rose nearly 68 percent in May to the highest since December, data showed on Monday.
The stronger U.S. Dollar helped drive August Crude Oil prices about 3 percent lower on Monday. Also helping to weaken the market are concerns over lower demand from Europe. Britain’s demand for fuel, on the other hand, is regarded as negligible at the global level.
Internationally traded Brent and U.S. West Texas Intermediate Crude Oil futures have lost about 7 percent since last Thursday’s settlement.
U.S. stocks were mostly lower on Monday, extending Friday’s steep decline. The Dow Jones Industrial Average briefly fell more than 300 points in mid-morning trade. The S&P 500 came off lows and struggled to hold the psychologically key 2,000 level. Investors remained relatively defensive, with utilities and telecoms the only advancing S&P sectors.
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Fear: Good For Fighting Wooly Mammoths, Bad For Investment Strategy

Fear and the uncertainty it creates is the biggest motivator for investors. Unfortunately, that misdirected motivation can cause big loses in your portfolio.

We’ve now seen the initial effects of Brexit. Instead of selling your stock, how about stepping away from the news and taking a deep breath or maybe even a walk? Why not pet your dog or eat some chocolate instead? This article is about money, panic and the stress that causes you to make poor investment decisions.

I feel your pain. I even fought the urge to call my trusted financial advisors, Ann and Mitch. I understand that Brexit is all over the media, and that the market reacted from fear, with the Dow Jones Industrial Average closing down 610 points on Friday, June 24 and the S&P 500 Index down 76 points. The only investment that seemed to move in an upward direction was gold, increasing 56 cents as a reaction to the news and a “move” to something tangible that you can touch and feel. We saw institutional investors flee from stocks into precious metals, government bonds and money markets. It is estimated that global stock markets lost $2 trillion in value on Friday.

Fear

As humans, we are wired to deal with surprise and fear, and the process is completely unconscious. This flight-or-fight response that our brain automatically activates has allowed us to survive when the going suddenly gets tough. Our brain sends out the warning signals to our body to tell it to get ready to act. Our adrenaline kicks into our blood stream, our heart rate quickens, our pupils dilate to take in as much light as possible, our blood pressure rises, our hands get sweaty, our muscles tense, and even our nonessential systems (like digestion and our immune system) shut down to allow more energy for our the pending emergency. We are physically and mentally primed for action.

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Saudi Arabia Oil Minister Says Oversupply Has ‘Disappeared,’ Signals Kingdom’s Return To Oil Balancing Role

Saudi Arabia — the world’s largest oil exporter and the de facto leader of OPEC — may return to its traditional role of balancing supply and demand, the kingdom’s energy minister said Wednesday. Khalid al-Falih’s comments, reported by the state-run oil giant Saudi Aramco, suggest that the global oil glut that has led to a steep fall in the price of the commodity over the past two years may be nearing an end.
“Despite the surplus in global oil production and lower prices, the focus of attention remains on countries such as Saudi Arabia which, due to its strategic importance, will be expected to balance supply and demand once market conditions recover,” Falih reportedly said following a meeting with officials of the U.S. Department of Energy in Washington, D.C. “The kingdom's oil policies are rooted in responsibility, and Saudi Arabia is seeking to maintain that balance while also giving heed to moderate prices for producers and consumers.”
Saudi Arabia abandoned its role as a “swing producer” in late 2014, when it refused to unilaterally reduce oil production despite signs of an impending glut. This was a primary factor in a staggering 70 percent drop in crude prices between September 2014 and the start of 2016, when they dropped to a 13-year low of below $30 a barrel.
In addition to hurting the kingdom’s revenues — 80 percent of which are derived from oil — the slump in oil prices has also dragged down OPEC’s collective revenue. In its annual statistical bulletin released Wednesday, the 13-nation bloc said that its members ran a combined deficit of $99.6 billion in 2015, compared with a surplus of $238.1 billion in 2014. This is the first time OPEC has registered a collective deficit since 1998, when a financial crisis in Asia drove down oil prices.
Over the past few months, however, amid signs of an easing glut, global oil prices have staged a tentative recovery. On Thursday, for instance, both Brent crude and West Texas Intermediate futures were trading near $50 a barrel, shrugging off a weaker-than-expected drop in U.S. crude inventories reported by the Energy Information Administration the day before.
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The End of Economic Forecasting

Why have economic forecasters recently been so wrong? Just two years ago, for example, the common perception was that the big emerging markets would drive global growth. That oil prices would remain above $100 per barrel. That interest rates would move higher. All of these predictions have been wildly wrong.
Yet these variances are neither a coincidence nor a temporary phenomenon. We have entered an age in which economic and financial forecasting is much harder and less reliable.
Why? Because financial markets and financial investors are increasingly driving the world economy and it is inherently volatile. Total global assets under professional management have now increased to an astonishing $75 trillion, according to Boston Consulting Group. These gigantic amounts are rocketing around the globe looking for returns. The result is that commodity markets, corporations, governments and other sectors are being relentlessly financialized—or tied to the fortunes of investments in markets—and thus less predictable.
Start with global growth. The International Monetary Fund’s 2013 forecast projected that global growth would accelerate to 4.1% the following year, with emerging markets like Brazil and Russia projected to grow at 4% and 3.8%, respectively. The Federal Reserve published a similar forecast. But today the biggest economic story in the world is slowing global growth, not expansion. Both Brazil and Russia are in recession, i.e., negative growth. In other words, a huge miss.
Next, interest rates. Less than two years ago, Goldman Sachs projected that the U.S. federal-funds rate, which is set by the Fed, would steadily rise and hit 4% this year. The bond futures markets, which incorporate massive trading volumes, also were implying an upward march of rates. Today, though, the federal-funds rate is 0.5% and open market rates have been hitting record lows in the U.S. and around the world. The predictions could hardly have been more wrong.
Then, oil prices. Exactly two years ago, the Energy Information Administration, the world’s best-known energy forecaster, projected in its reference case that oil prices would rise steadily from the mid-$90s over the next decade, while their low-bound projection didn’t fall below $70. The consensus was that demand for oil would be consistently strong. Instead we’ve seen the opposite happen. Prices fell sharply over the past year, hitting $29 per barrel and now sitting in the upper $40s.
These aren’t obscure categories—growth, interest rates and oil prices. These normally are good forecasters. Yet unpredictability may be the new normal, thanks again to finance, which increasingly is driving all global economics. Take the oil market. Approximately 80% of oil trading today takes place between financial institutions, not producers or users of the product. Oil has become a financial instrument, like gold. And it is subject to the same volatility which we see in the stock market, for example. Since many other commodity prices track oil prices and thus are tied to finance, too.
Financial factors also are increasingly dominating corporations—and the result is very short-term behavior. The rise of shareholder activism, hostile takeovers and newer techniques of executive compensation have put managements and boards of directors under tremendous pressure to deliver returns to shareholders now. The result is increasing focus on immediate earnings and share-price movements.
Nearly 80% of respondents to a 2014 CFO survey in the Harvard Business Review said they would sacrifice “economic value” to meet Wall Street targets. This is why so much capital has been used for share-buyback programs, rather than for long-term investment. With corporations themselves losing focus on the long term, it is harder for anyone to forecast their performance.
Financial markets are also encircling governments, as we’ve recently seen in China. For years, China’s economic and monetary authorities were viewed as skilled and effective. Then last fall the Chinese stock markets became extremely volatile. The authorities alternatively closed the markets, reopened them, imposed various limits on them, suddenly revalued their currency and severely undermined global confidence in the country. In other words, China’s authoritarian regime has been able to control almost everything, except the behavior of financial markets.
And why was Brazil’s President Dilma Rousseff impeached in May? In part, because Brazil is a commodity-centered economy and financial investors had driven down commodity prices and pushed the country into a deep recession. For the same reason, Russia has also fallen into recession, its currency has nearly collapsed and its financial reserves are dwindling. All of this will eventually compromise President Vladimir Putin’s global aggression.
Finance now represents the most powerful force on earth, even beyond nuclear weapons. Commodity prices, corporations and governments are increasingly at its mercy. Which is why reliable economic and financial forecasting may be history.
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Traders will be focused on this market signal as Brexit votes start coming in

Thursday’s Brexit vote result won’t officially be known until 2:00 am ET Friday. However, traders will be closely watching currency markets for clues throughout the day on Thursday as to whether or not the United Kingdom will leave the European Union.

Foreign exchange—or forex—is a marketplace where traders buy one currency while simultaneously selling another. If you have US dollars and need euros, you would sell your dollars while buying euros at the prevailing rate. There’s no central exchange like there is for stocks, but prices in the competing markets—mostly run by banks and forex dealers—closely track each other.

According to the latest data from the Bank for International Settlements (BIS), $5.3 trillion changes hands in forex markets each day. It takes the New York Stock Exchange over a month to match that amount. Nevertheless, in times of market turmoil, trading becomes more expensive because a lot of large traders simply leave the market. In addition, much of the volume is dominated by automated high frequency trading algorithms.

Expect volatility on the Brexit vote day

Traders expect markets to be extremely volatile on Thursday and Friday regardless of how the vote goes. As global markets are increasingly interconnected and correlated, those huge swings will affect all asset classes—stocks, bonds, derivatives and perhaps even real estate (according to one analyst).

George Soros recently said that the pound would eventually lose 20% of its value if there is a Brexit. That would wipe out $452 billion of wealth locked up in US stocks alone, according to data compiled by Yahoo Finance.

As it happens, the largest forex trading hub in the world is London, which is right in the thick of the action. Although the British pound sterling accounts for only 12% of forex volume, 41% of all the actual trading is done in the UK, according to data compiled by Yahoo Finance from the BIS.

Given the importance of the vote, no official exit polls are being conducted in the UK out of fears of being inaccurate. But with trillions of dollars worth of bets on the line, many hedge funds will be conducting their own private polls during the day, according to Keith Bliss of Cuttone & Co. The results of those polls will be reflected in forex prices, especially those denominated in the pound.

What to watch until the votes are counted

According to Bliss, the most important market to watch is the GBD/USD pair, which is the pound versus the dollar. It is currently trading at 1.468 (and can be followed in real time here). If traders believe there will be a Brexit, the price will go down; if they believe the UK will remain in the EU, the price will go up.

The key levels to watch initially are 1.4020 to the downside (4.5% below the current price) and 1.4895 to the upside (1.5% above), according to Bliss. “Of course, the market could trade above or below those levels.  However, I doubt it would go much below 1.25 or much above 1.55 on the initial trading Thursday morning,” says Bliss. (That downside level of 1.25 is nearly 15% below the current price and it has not been touched since 1985.)

Bliss points out that people tend to vote with their pocketbooks, which makes a Brexit less probable, but he adds, “Keep an eye on the sterling-dollar pair. That will give you the best clue in the world on what’s happening with the vote.”

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USD/CHF Forex Signal

Today’s USD/CHF Signals

 Risk 0.75% per trade.
Trades must be entered before 5pm London time today only.

Long Trade 1

• Go long after bullish price action on the H1 time frame following the next touch of 0.9500.
  
• Place the stop loss 1 pip below the local swing low.
  
• Adjust the stop loss to break even once the trade is 20 pips in profit.
  
• Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
  

Short Trades

• Go short after bearish price action on the H1 time frame following the next touch of 0.9688 or 0.9742.
  
• Place the stop loss 1 pip above the local swing high.
  
• Adjust the stop loss to break even once the trade is 20 pips in profit.
  
• Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
  

USD/CHF Analysis
 
The pair is in a downwards trend, with risk-off money flowing into the Swiss Franc among other destinations. However it is relatively quiet compared to Gold and USD/JPY.
Technically, the price has at the time of writing just bounced off a double bottom at 0.9580. This might be the low for today, but I am not trading on that: it is uncertain and against the prevailing trend.
The next solid support is at 0.9500 which should hold for some time.

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Comex High Grade Copper Futures (HG) Technical Analysis –

September Comex High Grade Copper futures continued to hold above four-month lows on Tuesday as the dollar steadied following comments by a Federal Reserve official suggesting fewer U.S. interest rate hikes were in the cards.

On Monday, St. Louis Fed President James Bullard said the U.S. economy may only need one rate hike for as long as 2 ½ years. A weaker Greenback tends to boost demand for dollar-denominated commodities by making them cheaper to foreign investors.
A drop in demand from China and growing inventories in Asia continue to put a cap on any rally. Additionally, reflecting a bearish sentiment, hedge funds and money managers raised their net short positions in COMEX copper contracts to the biggest on record, according to the U.S. Commodity Futures Trading Commission.

Technically, the main trend is down according to the daily swing chart. A trade through 2.1480 will turn the main trend to up. A move through 2.0180 will signal a resumption of the downtrend.

The main range is 2.3060 to 2.0180. Its retracement zone at 2.1620 to 2.1960 is the primary upside target.
The short-term range is 2.1480 to 2.0180. Its retracement zone at 2.0830 to 2.0985 is currently being tested.
Based on Monday’s close at 2.0970, the direction of the market today is likely to be determined by trader reaction to a resistance cluster at 2.0980, 2.0985 and 2.1010.
Taking out 2.1010 with conviction will signal the presence of buyers. This could trigger a surge to the upside since the next potential target is the main top at 2.1480. Taking out this top will change the main trend to up and could create enough upside momentum to challenge the main 50% level at 2.1620.
A sustained move under 2.0980 will indicate the presence of sellers. The first target is the short-term 50% level at 2.0830. This move took place earlier in today’s session.
A break through the 50% level at 2.0830 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with the next target angle coming in at 2.0580.
Look for an upside bias to develop on a sustained move over 2.1010 and a downside bias on a sustained move under 2.0830. The direction of the U.S. Dollar is also likely to influence the movement in copper prices. A stronger dollar will likely keep a lid on a rally. A weaker dollar could help trigger a breakout rally.
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