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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.
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