From the above chart:
a=b @1800(resistance for gold, as price was not able to breach $1800 mark.)
c=d=e=f @1550(Points c, d and e acted like good support zone for gold i.e whenever price of Gold comes down buyer's/bull's kicked in with some buying orders making price of gold to appreciate, but at point f we can see the failure of buyers buying at the support zone @ 1550 so price went down , as breach of support means lower levels are coming.)
3=4 @1200(Just like points c, d, e points 3 and 4 are also the support zone for gold.)
If we see points 1,2 and 4,5 we see a symmetrical triangle/wedge shaped pattern getting formed and the close on 5 September, 2014 @ $1270 should be zone for support but major support exists @ 1180-1200.
I expect the value of Gold to appreciate to at least $1500-1550 for the rest of the calender year.
Usually, Gold rallies happen when you have negative macro economic news from major economies.
The steroidal conduct of the FED(Federal Reserve) for the last 4 years , while it has buoyed up growth in the USA and things are looking very rosy, BUT it has actually enhanced the disparities between the major economies. While the unemployment in the US may have come down to 6.1%(August data) which is fairly low in recent history, BUT in EUROPE it remains at 12% and when you break down to smaller details, its in the vicinity of 40%-50% in places like GREECE,SPAIN AND ITALY. THESE ARE EXTREMELY DANGEROUS NUMBERS!!
Things are being swept under the carpet, and socio-economy, and geo-political divide that has stretched much more has not come back to the news tickers in the last 6-8 months, merely by common sense we can know those are the kinds of things that will start hitting us anytime soon.
So having looking at large macro numbers when i am reading the charts of all key global equity markets, whenever the trend reversal will come , it will come VERY RAPID , VERY FAST AND VERY DEVASTATING!!
I am expecting an emerging markets currency panic in the next 6-9 months.
The way Japanese yen has weakened and the way japanese central bank is gearing up for playing second fiddle to supplementing if any, tapering aggressively from the FED further from what it has announced that the japanese central bank will plug in and supply much more liquidity. It's creating a pressure on the Chinese Yuan in retaining its export supremacy and the kind of war kind of saber rattling that China and Japan have started again, which is also reflective in a fact that the DOW JONES AERO-SPACE AND DEFENSE INDEX has gone up by more than 60% last year, markets have been pricing global RIAL movements. I don't think a war will happen but those fear will be around, but i do think a terrorist attack will happen.
RUSSIA-UKRAINE CRISIS
The focus of meaningful economic sanctions has increasingly honed in on energy—and for good reason. More than 90 percent of Russian gas exports and 80 percent of its oil sales go to Europe. (Overall, energy sales generate more than half of the revenues needed to meet the Kremlin’s budget.) Further, fully half of the natural gas sold to Europe is transported through Ukraine. While European gas demand in total is projected to remain flat for the rest of the decade and perhaps longer, supplies from other sources (Norway, Algeria, Netherlands) are in decline. Consequently, Russia expects European and especially eastern and central European dependency to increase even as Russia looks east to Asia for additional markets in China, Korea and Japan as well as into the Pacific Liquefied Natural Gas (LNG) market.
Ironically the seeds of Europe’s current dependency grew out of an effort to diversify energy imports in the wake of the energy crises of the 1970s. Construction of pipeline infrastructure linking Soviet supplies to European markets seemed like a win-win for both parties. The breakup of the Soviet Union nearly a decade later, however, produced noticeable tensions with former Soviet states, now situated in key transit areas.
To some, the stark reversal in America’s energy fortunes—spawned by the dramatic resurgence in U.S. production as a consequence of the shale gas and tight oil revolutions provides the perfect foil for limiting Russian ambitions. The crisis in Ukraine has reinvigorated the debate in Washington over the Keystone XL pipeline, the accelerated permitting of LNG export facilities, and spurred calls for lifting the ban on crude oil exports to a beleaguered Europe. While the rhetorical flourish associated with the linkage is politically intoxicating, the underlying facts bear scrutiny.
For starters, while the acceleration of U.S. energy exports would add incremental barrels and gas volumes to the international markets(a good thing for consumers everywhere), the volume and timing of their availability—outside of supplies from the Strategic Petroleum Reserve (SPR)—would not be available in time to have an immediate impact on the current crisis. The first available LNG export shipment from the United States will not be ready until late 2015 or the spring of 2016 at the earliest and these volumes are already contractually committed.
On the oil side of the ledger, since Russia is one of the largest oil producers in the world - with exports averaging 7 million barrels a day, incremental U.S. production or even a sizeable Strategic Petroleum Reserve (SPR) release (the current maximum drawdown rate is about 4 million barrels per day for the first 90 days and declining thereafter) would not be adequate to replace or offset Russian barrels lost as the result of potential sanctions. Consequently, in the absence of Russian barrels, world oil prices would undoubtedly spike—causing economic pain for the United States and its sanctions partners.
More importantly, however, is the impact more onerous sanctions will have on the relationship between the United States, the EU and Russia going forward. We can certainly opt to boycott this summer’s Group of Eight meeting in Sochi and limit Russia’s participation in other global fora, but to what end? Russia will remain a permanent member of the UN Security Council and an uneasy partner in multilateral efforts to promote constructive resolutions to at least two other important international crises - the ongoing strife in Syria and resolution of the nuclear standoff with Iran. And further to that point, the removal of Russian oil from global markets could actually work to undermine the sanctions on Iranian oil sales.
ARGENTINA'S DEBT CRISIS
The main worry is the battle between U.S. hedge funds and the Argentina government over payment of the country’s bond debt stemming from the country’s 1998-2002 economic crisis.
The U.S. Supreme Court last month confirmed that Argentina must pay holdouts including vulture funds, including Paul Singer’s Elliott Management Corp., if it makes payments on restructured bonds. The case stems from the country’s record $95 billion default in 2002. While 92 percent of creditors agreed to accept a 70 percent loss, some investors sued for better terms. According to news reports, Argentina will default on the 2033 bonds if it doesn’t reach a settlement with holdouts or is granted a delay by Sept 30.
It is feared that if Argentina defaults it will lead to a wild bout of inflation, complete with out-of-control money printing and general disaster. Will Argentina’s bond market fiasco prove fatal for the country’s economy and financial market? And would such a crisis lead to a ripple effect across the global economy? I think there is a moderate possibility of this happening.
ARGENTINA'S DEBT CRISIS
The main worry is the battle between U.S. hedge funds and the Argentina government over payment of the country’s bond debt stemming from the country’s 1998-2002 economic crisis.
The U.S. Supreme Court last month confirmed that Argentina must pay holdouts including vulture funds, including Paul Singer’s Elliott Management Corp., if it makes payments on restructured bonds. The case stems from the country’s record $95 billion default in 2002. While 92 percent of creditors agreed to accept a 70 percent loss, some investors sued for better terms. According to news reports, Argentina will default on the 2033 bonds if it doesn’t reach a settlement with holdouts or is granted a delay by Sept 30.
It is feared that if Argentina defaults it will lead to a wild bout of inflation, complete with out-of-control money printing and general disaster. Will Argentina’s bond market fiasco prove fatal for the country’s economy and financial market? And would such a crisis lead to a ripple effect across the global economy? I think there is a moderate possibility of this happening.
