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Forex forecast for the week November 30 - December 4, 2015: Metal is not easy!
Market Forecast for the week November 30 - December 4:
Rate of gold XAU / USD forecast for the week
Despite the fact that the quotes of precious metal sales are down six consecutive weeks - gold is still overvalued asset. Investors are now focused on two key factors that have a downward pressure on the XAU / USD. Firstly, it is the low inflation expectations in the G-7 economies except the United States, however, there will only short-term improvement. The oil market is still in the hands of "bears" and this is a strong negative factor for inflation. Despite the current low price of "black gold": crude oil inventories in the US, rising nine consecutive weeks, oil storage facilities in Europe and China is almost filled to 100%.
Index Baltic Dry, which reflects the cost of transport of dry cargo by sea, is at the minimum level for the last 30 years, which clearly points to the decline in international trade and, accordingly, the stagnation of the world economy. Against this background, it is difficult to expect that investors will turn into optimists and will open long positions in the commodity market. On the contrary, we should expect the downtrend to continue. Second, the United States in recent years encouraging market participants positive macroeconomic statistics, which allowed the dollar index basket (USDX) exceed the level of 100.00. The strengthening of the US currency is traditionally a negative impact on the dynamics of the precious metal.
recommendations on gold for the week: Traders should open Sell at XAU / USD on the growth of quotations to 1064/1075 and record profits in 1041 mark.
Platinum and palladium XPT / USD and XPD / USD forecast for the week
Despite the positive release on orders for durable goods in the US in October, as well as the general correction in the commodity market in the first half of last week: the platinum group metals in the past five days have not been able to demonstrate strong growth in prices. The automotive industry in the US and China shows steady growth, which is a positive factor for the platinum and palladium, but investors are now more focused on the dynamics of the US dollar. Less than three weeks remain before the meeting of the US Federal Reserve, which can be implemented tighter monetary policies. The yield on two-year US Treasury bonds, which reflects the expectations of interest rate FED, is now in a five-year maximum. If you look at the dynamics of differential yields of short- and long-term bonds, a year ago the value was 169.7 basis points, and in early 2015 was fixed rate 149.6 bp On November 27 the spread of 126.6 basis points already Reducing the differential yield of two-year and ten-year government bonds have traditionally points to the future tightening of monetary policy FOMC.Thus, investors realize that the upward trend of the US currency will continue beyond that will adversely affect the value of the platinum group metals, as this cost is denominated in dollars. In this regard, a two-week consolidation of platinum and palladium, should be viewed as a set of short positions by large players, for the continuation of the downward trend in December.
Recommendations traders for the week: On platinum should open Sell position for XPT / USD on the growth of quotations to 845/868 and take profits around 810 and open Sell position of XPD / USD on the growth of quotations to 560/575 and take profits around 524.
S & P500 index forecast for the week
The new week will be very rich in the important macro-economic statistics and decide the fate of the change of monetary policy FED. However, the review should be to start with the negative information from China, where the Commission on the Securities and Exchange Commission began an investigation in respect of the largest brokers in China. This factor caused a rapid decline in the Shanghai Composite Index by 5.5%. US investors last Thursday and Friday resting because of Thanksgiving Day and in this regard, it is expected that on Monday trading on the NYSE will be opened in the "red zone". However, the correction should be used on Monday to open a long position on 1 December for two reasons. First, in the United States there is an increasing demand for "risky assets" that will contribute to the continued upward trend. The index of small-cap companies in the US was in the Russell 2000 growth leaders in the last five days. "Protective" communal sector, in contrast, has been in the ranks of the outsiders. This trend signals the willingness of investors to build positions in "risk assets". Secondly, during the week can be expected to yield a moderately positive macroeconomic statistics, which will also facilitate the flow of capital in the stock market. Some traders may be objected to me, if the statistics are positive, the US Federal Reserve will raise interest rates on December 16 and this is a negative factor for the stock market. Indeed, the increase in rates is a negative factor for the stock market, but there is one feature. FED will raise rates to a maximum of 0.25%, which is not such a critical level to bring down the stock market. In addition, when the publication of the October release on the labor market 6 November soared yield 2-year Treasury bonds, it did not raise the demand for funding currencies (the euro and the yen). When investors sell off their assets en masse, there is a demand for the funding currency - here was a reverse process, funding currency fell in value. In this regard, we can conclude that the market participants are not much concerned about the possible tightening of monetary policy. Of course, they keep track of all the factors that influence the policy of the Fed, but in the current environment exodus from the stock market no one plans.The central day of the coming week - Friday, when the release will be published on the labor market. Already on Thursday, December 3, based on the leading indicators it will be possible to understand what the numbers will be released on the Non-Farm. In this context, better to close long positions before the publication of the data, not to take on additional risks.
Recommendations traders on the index SP500: the new week is to open Buy position in S & P500 to reduce quotations to 2078/2065 and record profits in 2010 mark.