bounce has been stella, oils bounce has faded since Mondays pop, commodity currencies continue to get hit, POG AUD doing ok but if history is a guide, lower aud, eventually lower gold.
USD gold now drifted off the big round number 1200, data continues to improve, the big bounce over the last couple of weeks has been based on what I see as a few short term trading themes, (no order)
USD will pull back as its risen too hard, this theme is now being pressured by improved data, continued price war in oil as Middle East loses its pricing power and Russia, desperate, probably also sells into a completely over supplied market
Full blown QE out of Super Mario not delivered, and not withstanding its now def 100Pc coming next monthly (LOL), he will just keep talking as Oil is doing the QE for them. (lucky bastard)
More PBOC stimulus, hasn't come, newswires last night from China were just we will keep a realistic target for growth.
Commodity countries are all waking up to more supply coming online in just about everything, As prices continue to deflate after a short bounce in resent weeks, the data going forward will not show inflation, so the inflation hedge appeal is also sliding.
The probability of a financial and market collapse has to be diminishing by the collapse of the oil price, at least providing support in the short term for certain markets, diminishing the ongoing FEAR trade
Equities in manufacturing and consumer driven economies look set to improve EPS with the increase in disposable income the fall of energy gives them.
Commodity based economies are in a lot of trouble short term, far too much capacity in a market in which competition has exploded globally, until demand can soak up all of this new supply, or there is serious consolidation in the marketplace , globally the prices should remain weak for hard commodities and they have no reason to really bounce as its clearly an oversupply problem.
AS Russia has been a very large proportion of the resent demand, if they step back from what has been a terrible waste of their capital selling the USD to buy gold, there is potential for a retest of at least the yearly low.
Equity boys need gold to break to confirm their rally.
not only has the globe broken opec power as a cartel, (Opecs fault for cranking the price in 07 to build all those mega cities, but they created a mega global profit incentive) They might start to lose some of these assets now as their cash flow dries up and they begin to struggle with debt.
This drop in oil has not turned up in anyones figures yet, some must have been taking a complete bath, maybe when that starts to show, equities down and gold up on a fear trade but in the immediate term I think she goes down on profit taking, cant see any data (and there has been alot in the last week) that will get too many to rush in to drive prices higher higher higher.
Time will tell,,,probably be 1600 Monday just to make be look like an even bigger dickhead
