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Daily Analysis: Oil and Gold Shine as War Fears Persist

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Daily Analysis: Oil and Gold Shine as War Fears Persist

Introduction

This article was posted on Wednesday, 16:21, UTC.

Wednesday Market Recap

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Asset Current Value Daily Change
S&P 500 2347 -0.25%
DAX 12139 -0.15%
WTI Crude Oil 53.63 0.24%
GOLD 1277.75 1.05%
Bitcoin 1213 0.10%
EUR/USD 1.0614 0.00%

 

Global stocks are relatively strong today, despite the surge in safe-haven assets such as gold and the Japanese Yen. The surprising escalation regarding North Korea added to the tensions concerning Syria, although no direct conflict is likely between Russia, the US, and China. Oil also continued to march higher as Saudi Arabia voiced its intentions to extend the production cuts that were started in late 2016. The major indices are well above the lows from yesterday afternoon, with the European benchmarks being stronger and Japanese stocks being relatively weaker thanks to the yen’s rise.

Currencies are little changed so far, even the Pound is stable, despite the release of the crucial British employment report earlier today, which came in mixed. Wages grew by more than expected, while employment growth disappointed analysts. WTI crude oil is now back to the $54 per barrel level, right where it was in early March before it’s strong move lower, as geopolitical fears drive the price of the crucial commodity higher.

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WTI Crude Oil, 4-Hour Chart Analysis

Crytpocurrencies are mostly stable today, with Bitcoin still holding above the $1200 level, but below the short-term resistance at $1215. Litecoin remains the most volatile major altcoin, as it continues to trade around the $10 level in a wide consolidation pattern. Monero, Ripple and Dash are also trading near yesterday’s levels with Dash still being the weakest of pack. Ethereum is also still in the range that it has been hovering in for two weeks now.

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Technical Picture

S&P 500, 4-Hour Chart Analysis

The S&P 500 had a strong momentum move to the downside yesterday afternoon, but the index proved its short-term strength once again as it shot back higher later on and now it’s trading near the line-in-the-sand support/resistance zone near $2350 once again. The MACD also confirms the sideways price action, as t remains stuck near the 0 level, giving no clear signals. The low volatility environment could soon lead to a violent move, when the price leaves the current range.

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
10:30 CHINA CPI (yearly) 0.90% 1.10% 0.80%
11:00 UK Average Earnings 2.30% 2.10% 2.20%
14:30 UK Unemployment Rate 4.70% 4.70% 4,7%
14:30 CANADA Base Interest Rate 0.50% 0.50% 0.50%
14:30 US Crude Oil Inventories -2.2 million -0.7 million 1.6 million

 

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
2:30 AUSTRALIA Employment Change 20,300 -6,400
2:30 AUSTRALIA Unemployment Rate 5.90% 5.90%
3:30 CHINA Trade Balance 76 billion -60 billion
14:30 CANADA Manufacturing Sales -0.40% 0.6%
14:30 US PPI (monthly) 0.00% 0.3%
14:30 US Initial Jobless Claims (weekly) 242,000 234,000
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Feedback or Requests?

Mate Cser

Mate Cser

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

Comments
  • user

    AUTHOR Ershad

    Posted on 9:43 pm April 12, 2017.

    Hi Mate,

    Thanks for your article, I was going to ask you two questions, firstly what price would you recommend selling Ethereum at, and also what price would you recommend selling gold at before we see a pullback?

    kind regards,

    Ershad

  • user

    AUTHOR Mate Cser

    Posted on 10:21 pm April 12, 2017.

    Hi Ershad,

    in both cases, I would separate long-term investment positions and short-term trading positions. Ethereum is in a powerful long-term uptrend, while gold is most likely starting a new long-term uptrend, so a core investment position should be held through the corrections.

    As for trading, gold is late in its daily cycle and a correction is likely starting around the $1300-$1315 zone. Picking the exact top shouldn’t be your goal, you can simply follow the rise with your stop-loss; that takes away the urge of tracking your positions too closely.

    Same goes for Ethereum, but it’s a much more volatile asset, positions should be smaller. A sustained break below $38 could lead to a deep correction, but for now, another leg up is more likely. In that case, I would sell a part of my position near $53-$55 and follow the rest with a wider stop. I recommend following Jim’s (Jim Fredrickson) articles on cryptocurrencies as well, he has a deep understanding of the price movements.

    • user

      AUTHOR naruto9xit

      Posted on 9:14 am April 13, 2017.

      Hello, can you give me more predictions of how much money you can invest long term

      • user

        AUTHOR Mate Cser

        Posted on 5:01 pm April 13, 2017.

        Hi naruto9xit,

        thanks for your question! Stay tuned for our coming recap of the long-term trends and investment opportunities in global markets in the next few days!

        Mate

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