• 2 hours 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 6 hours Tesla, Apple Claim China Is Stealing Intellectual Property
  • 8 hours EV Giants Duke It Out For Battery Dominance
  • 1 day Tech Billionaire Takes Aim At Google
  • 1 day Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 1 day Expect A Pullback Before Gold's Next Major Rally
  • 1 day Why Interest On Gold Matters
  • 2 days Ten Extravagant Food Items For The Wealthy Only
  • 2 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 3 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 3 days Is A Gold Selloff Looming?
  • 4 days Central Banks Are Stashing Gold And Dumping Treasuries
  • 4 days Three Cannabis Trends Flying Under Investors’ Radars
  • 5 days $1.3 Billion In Cocaine Found On JPMorgan Vessel
  • 5 days Amazon Teams Up With Lady Gaga To Win Over Generation Z
  • 5 days Dollar Falls As Powell Teases Rate Cuts
  • 5 days Will The World's First Trillion Dollar Company Ever Bounce Back?
  • 6 days Many Americans Will Never Stop Working
  • 6 days Mozilla vs DarkMatter: The Cyber Espionage End Game
  • 6 days Chile Cracks Down On Environmental Infractions
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Stewart Thomson

Stewart Thomson

Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is…

Contact Author

  1. Home
  2. Markets
  3. Other

US Jobs Report: Key Driver For Gold

Graceland Updates 4am-7am
Jan 3, 2017

  1. While the December 31 selling in gold and gold stocks may have rattled gold bugs a bit, the fact is that gold begins 2017 in pretty good shape.

  2. Big fundamental themes that weighed on the "ultimate asset" in 2016 appear ready to reverse and become supportive for higher price action.

  3. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3cot1.png  For much of 2016, the size of the commercial trader net short position was a headwind for gold.

  4. In recent weeks, that's been reduced quite significantly.

  5. Leveraged hedge funds have also reduced their long positions. That's healthy action because the funds use too much leverage. As a result, modest selling by the commercial traders creates margin calls for the funds, and gold community investors can feel pain too.

  6. The bottom line is that in terms of the overall positioning on the COMEX, the gold market is in a much healthier position now.

  7. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3dubai1.png  Top jewellers in Dubai are predicting that the gold jewellery demand cycle is bottoming, and 2017 will see both Indians and UAE residents buying with confidence. This is very good news.

  8. Dubai is known as the "City of Gold", and the Shanghai Gold Exchange is very active in building gold market infrastructure there. This partnership is likely to strengthen in 2017.

  9. In the short term, gold has a rough general tendency to decline ahead of the US jobs report, and then rally after the report is released. The next report comes out this Friday.

  10. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3usd1.png Double-click to enlarge. In the world of fiat currencies, the price action of the US dollar versus the yen has tremendous influence on the gold price.

  11. There's a pennant-like pattern in play on this daily chart, and a run to the 125 area looks likely.

  12. In the big picture, though, there's a major bull non-confirmation taking place. The dollar is making intermediate trend highs against the USDX index, but not against gold or the yen.

  13. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3usd2.png The commercial traders are buying the safe haven yen aggressively, while the leveraged funds are shorting it.

  14. For the funds, this is a very dangerous situation, and one that could produce a violent move higher in the gold price at a time when that seems impossible.

  15. The inauguration of Donald Trump on January 20 could also coincide with a price of 125 on the dollar versus yen chart. If so, the rally in the gold price of the past few weeks could be set to accelerate then, in a very big way.

  16. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3usd3.png The franc is another safe haven currency, and its price action against the dollar has a high correlation with gold's action against the dollar.

  17. The commercial traders have an outstanding track record in both the gold and fiat currency markets. They are suddenly buying the Swiss franc against the dollar, and doing so very aggressively.

  18. Gold bugs should pay attention to current commercial trader liquidity flows, which suggest that a major gold price rally is either imminent, or already underway!

  19. Please click now: http://www.graceland-updates.com/images/stories/17jan/2017jan3bond1.png Double-click to enlarge. Another important correlation for gold investors to follow is the T-bond chart priced in US dollars.

  20. The T-bond appears to be basing, and commercial traders have also been buyers recently.

  21. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2017jan3bond2.png The commercial "smart money" traders are now net long the T-bond. Do they have information that other traders are missing? Perhaps they have some insight into what will happen after Donald Trump gets inaugurated?

  22. Regardless, they are clearly strong buyers of safe haven francs, yen, T-bonds, and decent buyers of gold.

  23. Please click here now: http://www.graceland-updates.com/images/stories/17jan/2016jan3gdx1.png Double-click to enlarge this GDX chart.

  24. I've been pretty emphatic that the $18 area is for buying GDX and $22 is for selling. From both a technical and fundamental perspective, it's logical that gold stocks pause here ahead of the US jobs report. This pause will help them launch a second and more successful assault on the $22 - $22.50 resistance zone, after the report is released!

Thanks!
Cheers
St

 


Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I'll send you my free "Gold Stocks Power Play" report. If an investor could only own six gold/silver stocks, which ones should they own? I cover ten candidates, and show investors my top six picks!

 

Back to homepage

Leave a comment

Leave a comment