MARKET BRIEFING – LONDON OPEN 20.07.2015
Gold has tumbled over 4% in the early hours of this week opening. The precious metal was trading below 1100.00 price for the first time during the past 5 years, reaching the low of 1086.00 per ounce.
The price slump was caused by the speculative selling in the Shanghai Stock exchange, therefore was not triggered by a simple price discovery. It is believed that a major hedge fund selling its holdings in the early Asian session.
“It was down to speculation here, someone taking advantage of the low liquidity environment,” Victor Thianpiriya, commodity strategist at ANZ, told CNBC. “Around 5 tonnes of gold was sold on the Shanghai Gold Exchange within the space of two minutes between 09:29 and 09:30. The daily volume last week was about 25 tonnes,” he observed. “It clearly wasn’t driven by fundamentals, because the U.S. dollar didn’t move at that time”.
Chinese Central Bank, one of the biggest gold buyers globally, has reported on Friday that its gold reserves were more than half of expected level. The Financial Times reported, the Central Bank’s Gold reserves were 1,658 tonnes (53.31 million fine troy ounces) as of the end of June, comparing to 1,054 tonnes reserves in April 2009.
Positive US economic data and the Federal Reserve continues affirmation that the US interest rate will be increased by the end of this year had added to the Gold price weakness, significantly influencing the reduction of the demand for the precious metal.
Analysts expect the price to continue to decline in the near future.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.0949
Target 2: 1.0713
Projected range in ATR’s: 0.0118
Daily control level: 1.1050
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5717
Target 2: 1.5481
Projected range in ATR’s: 0.0118
Daily control level: 1.5575
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 124.94
Target 2: 123.10
Projected range in ATR’s: 0.9239
Daily control level: 123.00
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9704
Target 2: 0.9512
Projected range in ATR’s: 0.0096
Daily control level: 0.9400
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3072
Target 2: 1.2870
Projected range in ATR’s: 0.0101
Daily control level: 1.2675
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7473
Target 2: 0.7289
Projected range in ATR’s: 0.0092
Daily control level: 0.7490
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1147.80
Target 2: 1118.74
Projected range in ATR’s: 14.53
Daily control level: 1160.00
OIL
The intraday technical outlook
Trend 1 hour: Up
Target 1: 59.00
Target 2: 55.28
Projected range in ATR’s: 1.8586
Daily control level: 51.00
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