It’s been a difficult month for gold. The precious metal continued to trade well below 1300 levels during April, its third consecutive month at a lower price after hitting 1347 back in February.
Technically, gold is approaching some key levels. On the weekly charts, the precious metal needs to hold above its current 1273 handle where the 50-week moving average sits. Closing below this week would expose 1267, which is a strong support followed by 1227 in the medium term. The most recent Commitment of Traders report, which tracks the positioning of market participants, showed that the number of gold longs dropped by 49,000, which suggests that although the market is still long for the commodity, the bullish optimism is waning.
Gold presents some excellent opportunities – having said this, it would be difficult to initiate short positions here, and instead I would look to buy the precious metal on dips, particularly from the 1267 handle. Gold’s future performance is inversely linked to the performance of the greenback, which has been on its own upside move since February.
While the Dollar Index has yet to close above 97.30 levels on a monthly basis, the greenback seems to have run out of steam and is instead consolidating in the current 96.50-97.30 range. The same COT report shows that although traders reduced their net long dollar positions, they were still long on 28,938 contracts, the highest level since the end of January.
While my bullish dollar tones from the past year may have lost a little lustre, a closing above 97.30 levels in April could spark a technical rally higher towards 100 through to the start of the third quarter. Fundamentally though, this may not be so straightforward. In the past six months we have seen the Federal Open Market Committee adopt a more dovish tone towards future rate hikes; they famously cut their expected rate hikes to zero for 2019 earlier this year.
Despite this, the Dollar Index is still treading above 96.50 levels which suggests an upside breakout could be on the cards. Of course the US data docket will drive US dollar pricing in the interim; weaker data will weigh down dollar prospects and vice versa, and we will continue to await developments from the US-China trade war story in the medium to longer term.
Keep an eye out for the quarter-on-quarter US gross domestic product data for the first quarter of 2019, which is due out on Friday. Following a previous reading of 3.4 per cent, markets are expecting the figure to come in slower at 2.1 per cent during the first quarter. Any level above that will no doubt see a nice bump in US dollar prices.
I am also looking forward to the FOMC statement due out next week. Again, with no rate hike expected its going to be about the Federal Reserve's tone in regards to how growth prospects are panning out. Any signs of optimism could see some more upside moves in the short term. The US non-farm payrolls report, due early next month, will offer some insights into how the job market is doing. Unfortunately, the impact of the payrolls report on markets have been lacklustre to say the least, but it remains a good indicator of how the Fed views the progression of the US economy. US Core inflation data, also set for release in May, is expected to come in at 0.2 per cent, slightly higher than the 0.1 per cent recorded previously.
The euro and British pound continue in their bearish trend – a view I maintain going forward indefinitely. Starting with the former, the dovish prospects of the European Central Bank will underpin this downside move and technically, we have seen strong selling pressure coming into the EUR/USD towards 1.1350 levels. The EUR/USD pair may be a good currency for short term opportunities – selling around this 1.1330-1.1350 channel and covering at 1.1250 levels. I would not look to create long positions in the pair before 1.1180 levels.
Finally the British Pound closed last week below 1.30 levels, which represents a key technical move for me. For the past nine weeks the GBP/USD gyrated between 1.30 and 1.33 as Brexit developments drove sterling. However, with an extension in those talks to the third quarter, the pound’s breakdown suggests there are more downsides to come – especially if there continues to be weekly closes below 1.3070 levels.
Gaurav Kashyap is a market strategist at Equiti Global Markets. The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti
MATCH INFO
Uefa Champions League semi-final, second leg result:
Ajax 2-3 Tottenham
Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
ABU DHABI ORDER OF PLAY
Starting at 10am:
Daria Kasatkina v Qiang Wang
Veronika Kudermetova v Annet Kontaveit (10)
Maria Sakkari (9) v Anastasia Potapova
Anastasia Pavlyuchenkova v Ons Jabeur (15)
Donna Vekic (16) v Bernarda Pera
Ekaterina Alexandrova v Zarina Diyas
Results
4pm: Al Bastakiya Listed US$300,000 (Dirt) 1,900m; Winner: Emblem Storm, Oisin Murphy (jockey), Satish Seemar (trainer).
4.35pm: Mahab Al Shimaal Group 3 $350,000 (D) 1,200m; Winner: Wafy, Tadhg O’Shea, Satish Seemar.
5.10pm: Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m; Winner: Wildman Jack, Fernando Jara, Doug O’Neill.
5.45pm: Burj Nahaar Group 3 $350,000 (D) 1,600m; Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass.
6.20pm: Jebel Hatta Group 1 $400,000 (T) 1,800m; Winner: Barney Roy, William Buick, Charlie Appleby.
6.55pm: Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m; Winner: Matterhorn, Mickael Barzalona, Salem bin Ghadayer.
7.30pm: Dubai City Of Gold Group 2 $350,000 (T) 2,410m; Winner: Loxley, Mickael Barzalona, Charlie Appleby.
Ovo's tips to find extra heat
- Open your curtains when it’s sunny
- Keep your oven open after cooking
- Have a cuddle with pets and loved ones to help stay cosy
- Eat ginger but avoid chilli as it makes you sweat
- Put on extra layers
- Do a few star jumps
- Avoid alcohol
Mohammed bin Zayed Majlis
RESULTS
2.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (Dirt) 1,200m
Winner: SS Jalmod, Antonio Fresu (jockey), Ibrahim Al Hadhrami (trainer)
2.45pm: Sharjah Equine Hospital – Maiden (PA) Dh40,000 (D) 1,000m
Winner: Ghallieah, Sebastien Martino, Jean-Claude Pecout
3.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (D) 1,700m
Winner: Inthar, Saif Al Balushi, Khalifa Al Neyadi
3.45pm: Al Ain Stud Emirates Breeders Trophy – Conditions (PA) Dh50,000 (D) 1,700m
Winner: MH Rahal, Richard Mullen, Elise Jeanne
4.25pm: Sheikh Mansour bin Zayed Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,200m
Winner: JAP Aneed, Ray Dawson, Irfan Ellahi
4.45pm: Sharjah Equine Hospital – Handicap (TB) Dh40,000 (D) 1,200m
Winner: Edaraat, Antonio Fresu, Musabah Al Muhairi
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World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
Result
Crystal Palace 0 Manchester City 2
Man City: Jesus (39), David Silva (41)
FROM%20THE%20ASHES
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Liverpool's all-time goalscorers
Ian Rush 346
Roger Hunt 285
Mohamed Salah 250
Gordon Hodgson 241
Billy Liddell 228
Opening weekend Premier League fixtures
Weekend of August 10-13
Arsenal v Manchester City
Bournemouth v Cardiff City
Fulham v Crystal Palace
Huddersfield Town v Chelsea
Liverpool v West Ham United
Manchester United v Leicester City
Newcastle United v Tottenham Hotspur
Southampton v Burnley
Watford v Brighton & Hove Albion
Wolverhampton Wanderers v Everton
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
How to report a beggar
Abu Dhabi – Call 999 or 8002626 (Aman Service)
Dubai – Call 800243
Sharjah – Call 065632222
Ras Al Khaimah - Call 072053372
Ajman – Call 067401616
Umm Al Quwain – Call 999
Fujairah - Call 092051100 or 092224411
Company%20profile
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
UAE currency: the story behind the money in your pockets
The Details
Kabir Singh
Produced by: Cinestaan Studios, T-Series
Directed by: Sandeep Reddy Vanga
Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa
Rating: 2.5/5
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
The biog
Favourite food: Tabbouleh, greek salad and sushi
Favourite TV show: That 70s Show
Favourite animal: Ferrets, they are smart, sensitive, playful and loving
Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can
Name of first pet: Eddy, a Persian cat that showed up at our home
Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big
UAE currency: the story behind the money in your pockets
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
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