The Commodities Value in Currencies

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     Analysis by Roberto Jbili                                                                    

     Park Capital Management                                                                

     italy, Milano 20-12-09

     info@globalizationstreet.com
    Tel: 0039 3272386209
                                                                           
     
  THE MARKETS                                                                                            
 
 

The Gold as explained in the Roberto Jbili fundamental points of trading remain an important indicator to price currencies, commoditiesa and other values which decide Global financial markets direction.

Traders was pricing many political tension into Gold price and then possible terrorist attacks which can came from Russia over the stable price of Oil at 75 USD when the real value composed from Dollar, Gold, Economic data show more than the trading prices at Nymex.

The first point which is the political tension and which came from Iran nuclear activity development, was resolved and came to b an important indicator for Gold sell-off.

The 2 point which is Oil price and possible Russian terrorist attacks to pump oil price was also resolved since oil price is going to fly.

Again the Iranian news came as an indicator to sell Gold. it is like Iraq war in 2003, when the war start the markets go up, the reason is that markets price in advance the tension news and observe less or non-possibilty to higher tension than the advanced priced.

Markets Go down, Iran Nuke news is weaker than to hold Gold at record.

The Gold rally is an important indicator that Gold is pricing future advanice of Oil price or the Gold contain rise in oil Price which will happen once Gold will correct and cash will be moved toward  Oil.

The value of Euro relative to the reserves of Gold of European countries which hold Gold to print Euro, made an downfall for Euro to 1.43 from our target 1.52 and this downfall is pricing more downfall for Gold since currencies was affected by Central banks activities more than the Gold ratios to USD then USD to other currencies.

The gold Downside and correction is an important indicator that Materials sector will correct and will bring markets down after huge gains, this is also confirmed by BHP Billiton which must correct before climb to above 2200 levels an target forecast by us before a long time.

This will be confirmed by Dax which today is leading global indicies since USA are selling Euro and the USD will be used later by banks to buy stocks and this point will lead the Oil higher, More USD demand to sustain USA financial problems will mean more Gold downside, but at same time the more cash will mean more economic activity, more oil demand, the financial problem was indicated by the less cash came from Global investors to buy US stocks and debts.  it came 20 Billion less than forecast, USA made the markets clam from a crash, people has no confidence in USA economy and politics.

USA directly made a large sell-off for many currencies held which includes about 200 Billions in cash and the fed confirmed that this step may take toward Feb.

Final note is that the drop of Gold from 1200 is priced into Oil gains from 70 to 74 levels. more Gold drop will be priced into Oil price. We expect an downside between 20 to 35% of Gold from recent highs and this will have to be priced into an Oil rally to 100 USD.

Note point:

Market action toward fundamental reports indicate further direction, Every report must be priced by actions. Fed bought Dollar and sold Currencies in responce to TIC report. this will have to price future gains by the reason in which Fed bought Dollar and which is Stock markets, but when Central banks will stop helping each other and cash will be returned, it will be an new carry trade problem and another credit high problems at a time central banks will stop lending. it will bring dow to below 6000 point making our 2 pattern of drop of our large forecast of markets

I expect that Energy will outperfom marterials in medium term, and this was confirmed by Exxon merger news.

 
 
                                                    
THE Charts                                                                                           
 
 
Silver /the Metal Chart of 2009/
 
 
 
Gold
 
 
EURO/USD
 
 
USD/JPY
 
 
GBP/USD
 
 
AUD/USD
 
 
  THE TRADING                                                                                                                                                            
 
  AS WELL EXPLAINED IN ABOVE CHARTS, WE ADVISE THE FOLLOWING TRADES:
 
  SILVER  ONLY TO 15 USD THEN A NEW RALLY.
 
  GOLD TO  920 USD LEVELS THENA A RALLY TO 1000 USD.
 
 

EURO/USD TO 1.38 LEVELS BEFOREE AN RALLY TO 1.60, HERE WE NOTE  THAT THE DOWNSIDE OF GOLD WILL NOT BE WELL PRICED IN USD VS EURO DOING TO THE OIL RISE TO 100 USD. GOLD TO USD RATIO WILL BE AFFECTED BY OIL.

 
 

USD/JPY FLAT BEFORE AN RALLY TO 1 VS 1 THEN A DROP TO BEOW 0.70 LEVELS, THE JPY EXCHANGE RATE VS DOLLAR REMAIN THE INDICATOR FOR STOCK MARKETS DIRECTION, ALSO THE INDICATOR FOR OIL DIRECTION. THE RISR OF JPY WILL BE PRICED INTO STOCK MARKETS RISE WHICH WILL REFLECT HEALTHLY ECONOMIC CONDITIONS WHICH WILL BE PRICED INTO  OIL PRICE.

 
  GBP/USD TO 1.75 LEVELS AND PLEASE READ NOTES ON CHART.
 
   AUD/USD TO  0.78 LEVELS THEN  A RALLY TO 1 VS 1 LEVELS, PLEASE READ  CHART.
 
 
 
 
   
   

 

 
 
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