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Gold Surges to 6-Year High Record

  • DAR Wong
  • 12 August 2019

CURRENCY MARKET OBSERVATIONS – 12 Aug 2019

 

 

 

Fundamental Outlook   After the U.S. and China trade talk failed in Shanghai on end July, President Trump announced the new tariff on USD300 billion worth of Chinese imports last week. Last week, Chinese Yuan dropped beyond 7.00 level for a Dollar value that is lowest in more than a decade. President Trump has labelled China as currency manipulator but Chinese Government rejects the accusation.

On the other hand, Goldman Sachs expresses it no longer expects a trade deal will be reached before 2020. Former Federal Reserve chief Larry Summers comments the global markets are at the most dangerous point at recession now since 2011, while flight of fund into Gold as safe haven. Meanwhile, he also expects U.K. to slide into recession due to a potential no-deal BREXIT at end October.

While Gold prices surge to above USD1500 /oz at 6-year high, Dow market has dropped 1000 points during intra-week but recoiled to close almost unchanged at 26,287 on Friday.

China’s consumer prices rose 2.8 percent in July on annual basis and above forecast. Another separate report on trade surplus grew RMB310 billion in July and beats consensus.

The British GDP contracted 0.2 percent in Q2 seasons and worst since 2012. Italian Government faces collapse as Deputy Prime Minister has called for election. The current Government of 2-party collation since 2018 encounters conflict and unable to progress further.

 

Technical Forecast   USD/JPY traded lower last week in caution but might tend to fall further. Currently, the trend is resilient at 106.50 level in case of recovery. Downside is prone to test 104.50 support but sinking beneath this level will open more leeway to dip at lower grounds.

EUR/USD rose in mild sentiment last week while Dollar began to recede. This week, we forecast the support will lie strong at 1.1100 but market trend might climb further. On piercing above 1.1250 level, the bulls will ascend to 1.1400 as our next target should Dollar correct further.

GBP/USD has been under the sheer pressure of BREXIT that is less than 100 days away. Pound keeps devalue as market traders wane confidence in the leadership of new Prime Minister Johnson. This week, we foresee the range will be tightly contained from 1.2000 – 1.2150 region but breaking beneath the support will break loose to a wave of new selling activity till 1.1800 area.

Gold prices have become the safe haven from fear of regional trade war conflicts. Market trend has reached USD1500 /oz and settled slightly below this benchmark on Friday. This week, we foresee mixed sentiment in market due to some profit-taking activities may occur. Overall range is contained from USD1475 – USD1525 /oz region while prone to correction.

WTI Crude prices have made recovery last week. Moving forward, we forecast some new demand will begin to enter market as Gold prices correct. This week, we reckon the trend will trade from USD53 – USD56 /barrel and prone to build up more buying interest. In technical aspect, the weakening Dollar is a good sign to help recovery in Crude prices.

Silver prices surged last week after broke above the USD16.60 /oz resistance. This week, we expect the Silver to climb higher while Gold prices may stall. The overall range is expected to trade from USD16.60 - USD17.40 /oz with another week of rising trend. Precious metals among Gold and Silver will move alternate momentum as Dollar falls.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded in strong uptrend last week as the market reached 3-month high. October19 Futures closed at RM2176 /MT on Friday. This week, the trend may rise further to test RM2220 /MT before profit-taking occurs. Trend activity is expected to contain from RM2140 – RM2220 /MT with some mixed trading towards end of the week.

 

 

DAR Wong has 30 years of trading and hedging experiences in global financial markets. The opinion is solely at his own.  He can be reached at dar@pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.