Metals – FX- Indices – update – close 14 June 2019

Precious Metals: Gold & Silver vs US Dollar, Euro, GBP and Ratio

Gold/USD Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Gold/USD Month Week Day
Close 14 June: 1342 (1340)
Trend Direction Up (Up) Up (Up) Up (Down)
Risk Weight 65-75 (65-75) 55-80 (35-60) 80-85 (85-90)
Allocation 100% (100%)

The week ended with all time frames in an uptrend. No change as a result.

(Strong performance which appears to be general dollar weakness across all asset classes. Technical risk analysis says being long this market. No change)


Silver/USD Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/USD Month Week Day
Close 14 June: 14.83 (14.98)
Trend Direction Down (Down) Up (Up) Up (Down)
Risk Weight 25-30 (25-35) 20-35 (10-25) 50-65 (75-80)
Allocation 100% (100%)

Hourly Daily and Weekly time frames are in an uptrend, whilst Monthly hesitates at the 25% risk weight level. No change

(Silver is a hard one to crack, but it continues to lean towards that moment of a major break upward. There are still short term technical pressures however with Daily showing some bearish divergence against weekly following last week's advance. We remain fully allocated based on the Medium Term Weekly turning rather bullish)


Gold/EUR Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Gold/EUR Month Week Day
Close 14 June: 1195 (1181)
Trend Direction Up (Up) Up (Up) Up (Down)
Risk Weight 80-85 (80-85) 55-80 (35-60) 80-90 (85-90)
Allocation 100% (100%)

Except for hourly nearing oversold risk weight, all listed timeframes are Up. The risk is extended moves as we have seen in equities for years. Therefore stay with trend in this case. No change.

(Our call to move back to fully allocated a week ago remains unchanged. Further dollar weakness can hold back a more rapid advance of Gold vs Euro)


Silver/EUR Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/EUR Month Week Day
Close 14 June: 13.23 (13.21)
Trend Direction Down (Down) Up (Up) Up (Down)
Risk Weight 40-45 (40-45) 25-35 (10-25) 55-65 (75-80)
Allocation 100% (100%)

Market tanked on Monday and recovered rest of the week with a mild setback on Friday. Daily and Weekly trend are technically dominant, so no change.

(We did see the expected rally last week and the technical picture remains positive. No change)


Gold/GBP Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Gold/GBP Month Week Day
Close 14 June: 1065 (1050)
Trend Direction Up (Up) Up (Up) Up (Up)
Risk Weight 75-90 (75-90) 80-95 (65-85) 85-95 (85-100)
Allocation 100% (100%)

The same technical picture as against USD and EUR, except GBP looks to become lower risk weight relative to USD and EUR. No change for now.

(The expected trend continued although Gold vs GBP looks further advanced than against other currencies. This could mean stronger GBP in the FX space in coming weeks. The technical picture still favors a full allocation to Gold)


Silver/GBP Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/GBP Month Week Day
Close 14 June: 11.77 (11.75)
Trend Direction Up (Up) Up (Up) Up (Down)
Risk Weight 35-40 (35-40) 40-65 (25-45) 60-75 (75-85)
Allocation 100% (100%)

Everything medium term technically points towards a higher silver price. No change.

(Still bottoming action with a solid advance last week. No change albeit a similar picture as against Gold due to a stronger eying GBP against USD)


Gold/Silver Ratio Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GOLD/SILVER Ratio Month Week Day
Close 14 June: 90.03 (89.07)
Trend Direction Up (Up) Down (Down) Down (Down)
Risk Weight 90-100 (90-95) 90-95 (90-95) 80-85 (75-80)
Allocation 50/50 AU/AG (50/50 AU/AG)

The ratio has TRIPLED since the low in April 2011. An unprecedented uptrend with a singlt 6 months correction in 2015. Risk weight levels remain very high and silver should remain a favorite in the metals space. We stay with a 50/50 distribution between Gold and Silver for Wealth preservationists. Speculators may start to increase the silver component towards 75% for a medium term hold.

(No change. A proper change of trend is in the making although the relative silver weakness may not be quite over. The correct risk approach is to continue hold silver. This is a solid speculative long position in the long term based on low risk)


EUR/USD FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

FX: EUR/USD, USD/CHF, GBP/USD, GBP/EUR, Bitcoin

EUR/USD Month Week Day
Close 14 June: 1.1205 (1.1330)
Trend Direction Up (Up) Up (Up) Down (Up)
Risk Weight 5-10 (5-15) 30-35 (25-35) 60-75 (75-80)
Allocation 100% (100% hedge)

Short term breaking news seems to drive traders, whilst many analysts still predict a strong dollar advance. We believe from our technical analysis that dollar strength is indeed fading and the quick drop of EUR last Friday is just another nail into the formation of a stronger bottom building. No change as the risk is for USD to weaken medium and long term.

(Last week presented a break away rally which we have seen 3 of 4 times this year. The weekly close was the strongest in over one year and may indicate that dollar strength is fading. No change)


USD/CHF FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

USD/CHF Month Week Day
Close 14 June: 0.9980 (0.9867)
Trend Direction Down (Down) Down (Down) Up (Down)
Risk Weight 75-80 (65-80) 20-30 (20-40) 35-40 (15-25)
Allocation 100% (100%)

This pair may hover around par for a while longer with risk being towards a weaker dollar. No change.

(Swissy has been relatively strong the past weeks and may find some resistance. It however follows the general picture against a weaker US dollar. No change)


Cable GBP/USD FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GBP/USD (Cable) Month Week Day
Close 14 June: 1.2580 (1.2725)
Trend Direction Down (Down) Up (Up) Down (Up)
Risk Weight 15-30 (20-30) 5-15 (10-15) 45-60 (45-60)
Allocation 100% (100%)

Cable finished the week lower than expected following unsubstantiated political rumour. That is short term and should have no impact on our MT and longer term outlook. Technically we must not speculate on a continuation of lower bottoms and the current risk weight position demands a fully hedged long dollar exposure. No change.

(We anticipate a stronger pound against the USD and relatively strong against other majors. This is purely technical, even though the long term is still in a down trend and showing signs of becoming tired. MT weekly wants to turn bullish and we pre-empt the possibility of a further advance. As a result we increase the long dollar hedge to 100%)


GBP/EUR FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GBP/EUR Month Week Day
Close 14 June: 1.1215 (1.1225)
Trend Direction Down (Down) Down (Down) Down (Down)
Risk Weight 50-65 (50-65) 0-10 (0-15) 15-25 (10-20)
Allocation 75% (75%)

Hovering around the 1.1225 level all week, risk weight in different time frames demands the higher hedge of short GBP or long EUR exposures. No change in GBP favoured over EUR by 3 to 1.

(In line with above comments, GBP trend, which has been weak looks to want to turn up. We increase the hedge on long EUR to 75%, i.e. we expect GBP to strengthen ag EUR relatively soon. This is bottom picking based on ST and MT relative oversold risk weight)


BTC Bitcoin Price, Weekly risk position analysis based on Daily, Weekly and Monthly data

BITCOIN BTC/USD Month Week Day
Close 14 June: 8650 (8029)
Trend Direction Up (Up) Down (Down) Up (Up)
Risk Weight 35-60 (35-60) 85-90 (90-95) 60-75 (20-30)
Allocation 0% (0%)

BTC blasted through 9000 this weekend. The crypto community i extremely bullish with forecasts floating of 50,000 plus within 1 or 2 years. This is a very hot kitchen and not for the faint hearted. Technically still very high risk because this market is completely controlled but just a few major players. No change and no more than lost opportunity.

(Look at the price volatility and ask if you wish to be part of this insanity. We don't take that risk)

Remaining 'opening up' gap still to fill at 2828. We exclude weekend action to determine opening gaps as major players are not participating in size.
If this market is poised to turn from extremely overbought (Dec 2017) to completely oversold, it doesn't appear to be finished.


INDEX: US30, S&P500, Dollar Index, Brent crude oil

Dow Jones Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

US30 Month Week Day
Close 14 June: 26089 (25984)
Trend Direction Down (Down) Up (Down) Up (Up)
Risk Weight 75-80 (75-80) 30-45 (30-35) 85-90 (65-85)
Allocation 0% (0%)

Approaching the highs again without technical risk weight confirmation. This is a potential investment divergence risk greater than the BTFD opportunity. Great till it ends. No change from our October 2018 stance.

(An incredible recovery was manifest last week of the BTFD type. MT even showed a bullish reversal moving below the previous week lower and closing higher. As the risk remains high in LT time frame we stay away from this market until a valid technical entry point presents itself. Missing opportunity in this market still appears the better risk position. This has not changed since Q3 of 2018. No change, no position)


S&P 500 Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

Standard & Poor 500 Month Week Day
Close 14 June: 2887 (2873)
Trend Direction Down (Down) Up (Down) Up (Up)
Risk Weight 80-85 (80-85) 40-50 (40-50) 85-90 (60-80)
Allocation 0% (0%)

Same picture as INDU. This is a trading market for very short term positions only. There are technical opportunities intra-day playing hourly vs daily and daily vs weekly, but investment risk in these indices is high. Individual stock opportunities are different but tyhe technical picture smells like a slowdown is on its way. No change.

(Similar massive BTFD recovery as INDU. The LT technical show continued high risk, thus no change)


USdollar Index Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

USD Index Month Week Day
Close 14 June: 97.45 (96.56)
Trend Direction Down (Down) Down (Down) up (Up)
Risk Weight 85-95 (85-90) 55-65 (55-70) 25-40 (15-20)
Allocation 100% (100%)

The index technically confirms our analysis of the USD vs other majors. Owning future dollar income without a hedge is a high risk. We stay at 100% cover.

(The USD dropped 1,5% vs other majors. This trend looks to want to continue for some time to come. A fully hedged long dollar exposure is the only sensible risk position. No change)


Brent Crude oil Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

Brent Month Week Day
Close 14 June: 62.04 (63.24)
Trend Direction Down (Down) Down (Down) Down (Up)
Risk Weight 40-50 (40-50) 15-25 (20-40) 10-20 (10-20)
Allocation 0% (0%)

Crude is a bit similar to Gold but in opposite direction. Trends are down even though marginally. Dollar weakness may trim oil price decline. Short term news about possible Iranian activity does not affect the fundamental demand for oil based on economic activity long term. It appears weak and technicals confirm this. For now at least and we stay without any position in oil until a break to the upside materializes. We may get there soon with risk weight where it is, but not quite yet.

(The slight rally following last weeks strong price drop is not an indication of the a major trend change. We will not invest in this market as any ST strength is not met with a MT or LT low risk weight entry. No change since early Q4 2018)

Posted in A - All Financial Blogs | 2020 Forecast.

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