Will War Drums, Inflation Fears Ignite Gold and Silver Markets?

By Money Metals News Service

Monday’s spike in crude oil prices could be a game changer – for geopolitics, for the economy, and for investors.

Normally it would be foolhardy to draw big, sweeping conclusions from a single day’s trading activity.

Oil Prices Up

But in this case, it’s not just the fact that oil prices surged 13% to over $62/barrel. Or even the fact that more than 5% of the world’s oil producing capacity suddenly got taken offline.



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The world can cope with volatility in the energy market. An increasingly volatile environment for all assets presents much greater challenges.

But few investors are positioned to cope with the rising risk of war in the Middle East. Few are prepared for the prospect of persistently higher energy prices and higher inflation. Even fewer are taking steps to insulate their portfolios from future black swan events.

Black swans by their nature are impossible to predict. No one saw a devastating drone strike on Saudi Arabian oil production facilities coming.

Delivering the biggest single blow in history to the global oil supply turned out to be surprisingly easy.

Unfortunately, it may be just as easy for terrorists or rogue states to target electrical grid infrastructure, nuclear power facilities, computer systems, or gatherings of world leaders. A single, crudely executed strike could not only inflict disproportionate damage to the global economy but also potentially trigger a full-scale war.

President Donald Trump says the United States is “locked and loaded,” ready to attack Iran for its alleged role in shuttering the Saudis’ oil facilities.

Measuring the Risks

Republican Senator Lindsay Graham is suggesting we bomb Iranian oil refineries in retaliation – a move that could trigger another oil price spike and possibly provoke a Russian response.

Things have escalated rapidly since President Trump controversially planned – then cancelled – a meeting with the Taliban last week. He then proceeded to fire his national security advisor, John Bolton, who had been pushing for war with Iran.

That upset some of the war hawks on Capitol Hill. But the sudden attack on our putative ally Saudi oil machinery gives them one of their best opportunities to push Trump toward war.

How can investors best position for rising risk factors in heretofore sanguine markets?

Monday’s dramatic market moves offer some guidance. Energy stocks surged. Gold and silver gained 0.8% and 2.5%, respectively, on safe-haven buying.

The major stock market averages fell, but only modestly. There was no indication of panic selling taking hold.

Of course, the government’s Plunge Protection Team had the weekend to get circuit breakers on the exchanges in place. President Trump also vowed the U.S. would stand ready to tap the Strategic Petroleum Reserves if necessary to boost oil supplies.

Investors appear to still be largely complacent when it comes to the threat of future oil spikes.

For the past few years the conventional wisdom has been that oil supplies are plentiful and therefore prices should remain low. But those low prices reflected, to some extent, complacency about geopolitical risks.

Low oil prices have wrecked many marginal producers. Frackers and deep-sea drillers have been practically obliterated during a brutal bear market for the oil and gas sector that extended into this summer. It could leave a legacy of severe under-investment in oil production capacity.

The last five recessions were each preceded by a run-up in crude prices of at least a 90%, according to DataTrek Research. A one-day spike won’t trigger a recession, but we are very late into the economic cycle where the energy sector typically assumes leadership, before the economy and stock market roll over.

A surge in oil prices would put the Federal Reserve in a tough position. Rising energy costs hurt consumers and raise the odds of a recession. But if the Fed tries to help the economy by stimulating, it risks pushing energy prices, and price inflation more broadly, even higher.

If the Fed cuts rates again this week as expected, it will be betting that the oil spike is transitory and that inflationary pressures remain well contained.

The markets will have their say after the central bank releases its policy statement on Wednesday. If investors sense monetary policy is heightening inflation risk, they will likely bid up precious metals.

Physical precious metals are, in a very real sense, a form of stored energy. It takes an immense amount of energy to mine ore from the earth and refine it into lustrous gold and silver coins you can hold in your hand.

Higher energy and labor costs will ultimately translate into higher production costs for metals and higher spot prices. A surge in safe-haven demand from investors could have an even bigger, more immediate impact.

Perhaps one day headlines will appear throughout the mainstream media describing gold and silver price shocks that nobody saw coming.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Lean Hogs Analysis: Higher Chinese import bullish for LHOG

By IFCMarkets

Higher Chinese import bullish for LHOG

China exempted US pork from additional tariffs and stated support for more imports from US. Will the LHOG continue gaining?

China’s pig farming has been decimated by African swine fever outbreak, studies estimate China’s pig supply may have fallen by about 40% from a year ago. Pork is the most consumed meat in China, Beijing announced last week it will not increase tariffs on certain US agricultural products, including pork. And stated it supported buying soybeans, pork and other agricultural products in accordance with market principles and WTO rules. Lower pig supply and higher Chinese demand is bullish for LHOG.

LHOG rises toward MA(200) 09/17/2019 Technical Analysis IFC Markets chart



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On the daily timeframe the LHOG: D1 is rising toward the 200-day moving average MA(200).

  • The Parabolic indicator gives a buy signal.
  • > The Donchian channel indicates uptrend: it is widening up.
  • The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
  • The Stochastic oscillator is in the overbought zone, this is bearish.

We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 68.257. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the lower Donchian boundary at 59.151. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (59.151) without reaching the order (68.257), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Market Analysis provided by IFCMarkets

Ichimoku Cloud Analysis 17.09.2019 (AUDUSD, NZDUSD, USDCAD)

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is trading at 0.6832; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s downside border at 0.6780 and then resume moving upwards to reach 0.6935. Another signal to confirm further ascending movement is the price’s rebounding from the rising channel’s downside border. However, the scenario that implies further growth may be canceled if the price breaks the cloud’s downside border and fixes below 0.6765. In this case, the pair may continue falling towards 0.6685. After breaking the cloud’s upside border and fixing above 0.6875, the price may continue moving upwards.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand Dollar vs US Dollar”



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NZDUSD is trading at 0.6331; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 0.6355 and then resume moving downwards to reach 0.6255. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6405. In this case, the pair may continue growing towards 0.6485. After breaking the rising channel’s downside border and fixing below 0.6295, the price may continue moving downwards.

NZDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCAD, “US Dollar vs Canadian Dollar”

USDCAD is trading at 1.3248; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s upside border at 1.3255 and then resume moving downwards to reach 1.3090. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 1.3275. In this case, the pair may continue growing towards 1.3345. After breaking the cloud’s downside border and fixing below 1.3160, the price may continue moving downwards.

USDCAD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

EURUSD Analysis: German ZEW sentiment improvement bullish for EURUSD

By IFCMarkets

German ZEW sentiment improvement bullish for EURUSD

ZEW Indicator of economic sentiment for Germany rose significantly in September 2019, after a decline in August. Will the EURUSD rise?

EURUSD rising toward MA(200)

The price chart on 1-hour timeframe shows EURUSD: H1 is trading sideways. The price is below the 200-period moving average MA(200) which has leveled off. And the RSI is at 50 level and set to fall below. There is no trend yet formed, traders have to decide when it would be a best time to enter the market.



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Market Analysis provided by IFCMarkets

Japanese Candlesticks Analysis 17.09.2019 (USDCAD, AUDUSD)

Article By RoboForex.com

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the H4 chart, after rebounding from the rising channel’s downside border, USDCAD has formed several reversal patterns. Right now, the pair is trying to reverse after forming Harami pattern. At the moment, it may be assumed that the price may complete a slight correction and resume growing towards 1.3333. However, we shouldn’t ignore a possibility that the instrument may return to the support line and update the low.

USDCAD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”



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As we can see in the H4 chart, AUDUSD has formed several reversal patterns, including Shooting Star, close to the resistance level. Right now, the pair is trying to reverse. Judging by the previous movements, we may assume that the price may finish a slight pullback and then continue trading downwards to reach 0.6792. However, we shouldn’t ignore a possibility that the instrument may resume growing towards 0.6900.

AUDUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2019.09.17

by JustForex

The EUR/USD currency pair

  • Prev Open: 1.10731
  • Open: 1.09997
  • % chg. over the last day: -0.72
  • Day’s range: 1.09903 – 1.10175
  • 52 wk range: 1.0931 – 1.1817

Aggressive sales were observed on the EUR/USD currency pair yesterday. The fall in quotes exceeded 70 points. The trading instrument is currently consolidating. The local support and resistance levels are: 1.09850 and 1.10150, respectively. Participants in financial markets continue to monitor the development of the situation in the oil market. Today we expect the publication of important economic releases. We recommend opening positions from key support and resistance levels.

The Economic News Feed for 17.09.2019:

  • – ZEW economic sentiment index in Germany and EU – 12:00 (GMT+3:00);
  • – Industrial production in the USA (EU) – 12:00 (GMT+3:00);
EUR/USD

Indicators do not give accurate signals: 50 MA began to cross 100 MA.

The MACD histogram is in the negative zone but above the signal line, which gives a weak signal to sell EUR/USD.



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The Stochastic Oscillator is in the neutral zone, the %K line began to cross the %D line. There are no signals at the moment.

  • Support levels: 1.09850, 1.09450
  • Resistance levels: 1.10150, 1.10550, 1.10850

If the price consolidates above 1.10150, expect further growth toward 1.10500-1.10700.

Alternatively the quotes could decrease to 1.09600-1.09400.

The GBP/USD currency pair

  • Prev Open: 1.24649
  • Open: 1.24248
  • % chg. over the last day: -0.56
  • Day’s range: 1.23960 – 1.24316
  • 52 wk range: 1.1995 – 1.3385

The GBP/USD currency pair stabilized after a protracted rally. A trading instrument is consolidating. In the near future, technical correction is not ruled out. At the moment, GBP/USD quotes are testing a round level of 1.24000. Mark 1.24600 acts as local resistance. Investors are waiting for new information regarding the Brexit process. Positions must be opened from key levels.

The Economic News Feed for 17.09.2019 is calm.

GBP/USD

Indicators do not give accurate signals, the price has fixed between 50 MA and 100 MA.

The MACD histogram is in the negative zone, which signals a possible correction of the GBP/USD currency pair.

The Stochastic Oscillator is in the neutral zone, the %K line crossed the %D line. There are no signals at the moment.

  • Support levels: 1.24000, 1.23550, 1.22850
  • Resistance levels: 1.24600, 1.25000

If the price consolidates below the round level of 1.24000, expect a correction toward 1.23600-1.23300.

Alternatively, the quotes can grow toward 1.24900-1.25200.

The USD/CAD currency pair

  • Prev Open: 1.32203
  • Open: 1.32392
  • % chg. over the last day: +0.21
  • Day’s range: 1.32343 – 1.32595
  • 52 wk range: 1.2727 – 1.3664

An ambiguous technical picture has developed on the USD/CAD currency pair. Looney is in lateral movement. There is no defined trend. USD/CAD quotes test local support and resistance levels: 1.32350 and 1.32650, respectively. The Canadian dollar is supported by the positive dynamics of oil quotes. We recommend that you closely monitor the development of the situation in the oil market. Positions must be opened from key levels.

At 15:30 (GMT+3:00), data on sales in the manufacturing sector of Canada will be published.

USD/CAD

Indicators do not give accurate signals: the price crossed 50 MA.

The MACD histogram is near 0.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which gives a signal to sell USD/CAD.

  • Support levels: 1.32350, 1.32100, 1.31800
  • Resistance levels: 1.32650, 1.32850, 1.33150

If the price consolidates below 1.32350, USD/CAD quotes are expected to fall. The potential movement is to 1.32000-1.31800.

An alternative could be the growth of the USD/CAD currency pair to a round level of 1.33000.

The USD/JPY currency pair

  • Prev Open: 107.531
  • Open: 108.148
  • % chg. over the last day: +0.37
  • Day’s range: 108.022 – 108.369
  • 52 wk range: 104.97 – 114.56

The USD/JPY currency pair continues to trade flat. There is no defined trend. At the moment, the local support and resistance levels are: 107.850 and 108.250, respectively. Demand for safe haven currencies has grown due to the tense situation in the Middle East. In the near future, technical correction of the trading instrument is not ruled out. We also recommend that you pay attention to the dynamics of the yield of US government securities. Positions must be opened from key levels.

The Economic News Feed for 17.09.2019 is calm

USD/JPY

Indicators do not give accurate signals: the price is consolidating near 50 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy USD/JPY.

The Stochastic Oscillator is in the neutral zone, the %K line crossed the %D line. There are no signals at the moment.

  • Support levels: 107.850, 107.500, 107.200
  • Resistance levels: 108.250, 108.500

If the price consolidates below 107.850, expect a correction toward 107.500-107.200.

Alternatively, the quotes could grow toward 108.500-108.700.

by JustForex

Who are the biggest winners and losers from surging oil prices?

  • Oil prices explode higher on Saudi supply disruption
  • Biggest winners and losers from negative supply shocks
  • Dollar enjoys risk-off flows

The explosive appreciation in oil prices could not have come at a more testing period for the global economy currently embroiled in trade wars, geopolitical risks and fears over decelerating economic growth.

Oil bulls are clearly back in the picture after drone attacks on Saudi Arabia’s oil fields over the weekend wiped out 5.7 million barrels of the kingdom’s production, equivalent to more than 5% of the world’s daily supply. Although Saudi Arabia’s spare capacity and US Strategic Petroleum Reserves could plug some of the lost output, where oil trades in the near term will be influenced by how long it takes for Saudi production to fully recover. It is this concern over negative supply shocks amid geopolitical tensions which should keep oil prices buoyed in the short term. However, where the commodity trades in the longer term will depend on many factors including global growth, geopolitics and US-China trade developments.

The dynamics influencing oil prices are certainly swinging back to supply-side factors and this is being reflected in oil’s bullish price action following the monumental disruption.

Who are the biggest winner and losers from higher oil prices?



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While higher oil prices are a welcome development for oil-producing countries like the United States, Russia and Canada among many others, it has the potential to increase the running costs of businesses ultimately igniting inflationary pressures. Rising inflation will be a drag on consumer spending, which may end up pressuring economic growth further.

Emerging market energy importers like Turkey, India and South Africa will feel the heat from appreciating oil prices as it may not only stoke inflationary pressures but complicate the central banks’ efforts to ease monetary policy to boost growth. Rising oil also presents a risk to China, the world’s second-largest economy, due to its strong appetite for imported energy.

The biggest winner will be the United States due to its status as the world’s largest oil producer, although everyone will lose if elevated oil prices tip the global economy into recession.

Dollar firms on safe-haven flows 

Heightened geopolitical tensions in the Middle East are encouraging investors to maintain a safe distance from riskier assets.

In times of uncertainty and unease, the Dollar is still seen as a destination of safety and this continues to be reflected in the Dollar Index (DXY). Should risk aversion remain a major theme, the DXY will push higher ahead of the Federal Reserve meeting this week. While the path of least resistance for the DXY points north, where prices close this week will be heavily influenced by the FOMC meeting and Chair Powell’s press conference.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Dow snaps eight session win streak

By IFCMarkets

US stock indexes pulled back on Monday as oil prices jumped after a Saturday attack on Saudi Arabia’s oil-production facilities. The S&P 500 finished 0.3% lower at 2997.96. Dow Jones industrial dropped 0.5% to 27076.82. The Nasdaq composite fell 0.3% to 8153.54. The dollar strengthening resumed despite expectations of a rate cut at the Fed two-day meeting which starts today: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, jumped 0.5% to 98.64 and is higher currently. Stock index futures point to mixed openings today.

European stocks turned lower on Monday as tensions rose in Middle East after the weekend drone attack on Saudi Arabia oil refinery. Both GBP/USD and EUR/USD turned lower yesterday with both pairs down currently. The Stoxx Europe 600 index ended 0.4% lower led by consumer goods shares. The DAX 30 lost 0.7% to 12380.31. France’s CAC 40 dropped 0.9% and UK’s FTSE 100 slid 0.6% to 7321.41 as European Commission President Jean-Claude Juncker said it was now up to the British government to offer a solution to the Brexit impasse.

Asian stock indices are mixed today. Nikkei rose 0.1% to 22001.32 as President Trump told US and Japan were ready to sign a limited trade deal and the yen slide against the dollar continued. Markets in China are falling after report Monday industrial production growth was lower than expected in August: the Shanghai Composite Index is down 1.7% and Hong Kong’s Hang Seng Index is 1.6% lower. Australia’s All Ordinaries Index extended gains 0.3% as Australian dollar slide against the greenback accelerated.

HK50 falls after drone attacks    09/17/2019 Market Overview IFC Markets chart



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Brent futures prices are extending gains today after sharp gains Monday following Saturday’s attack on Saudi oil facilities that halved the kingdom’s oil output. Prices jumped yesterday: November Brent crude closed 14.6% higher at $69.05 a barrel on Monday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Turbocharging Python with Command Line Tools

Finally, the output of the Pandas DataFrame with the cluster assignment is show below. Note, it has cluster assignment as a column now.

$ python -W nuclearcli.py cluster

$ python -W nuclearcli.py cluster --num 2

Summary

The goal of this article is to show how simple command-line tools can be a great alternative to heavy web frameworks. In under 200 lines of code, you’re now able to create a command-line tool that involves GPU parallelization, JIT, core saturation, as well as Machine Learning. The examples I shared above are just the beginning of upgrading your developer productivity to nuclear power, and I hope you’ll use these programming tools to help build the future.

Many of the most powerful things happening in the software industry are based on functions: distributed computing, machine learning, cloud computing (functions as a service), and GPU based programming are all great examples. The natural way of controlling these functions is a decorator-based command-line tool – not clunky 20th Century clunky web frameworks. The Ford Pinto is now parked in a garage, and you’re driving a shiny new “turbocharged” command-line interface that maps powerful yet simple functions to logic using the Click framework.

Noah Gift is lecturer and consultant at both UC Davis Graduate School of Management MSBA program and the Graduate Data Science program, MSDS, at Northwestern. He is teaching and designing graduate machine learning, AI, Data Science courses and consulting on Machine Learning and Cloud Architecture for students and faculty.

Noah’s new book, Pragmatic AI, will help you solve real-world problems with contemporary machine learning, artificial intelligence, and cloud computing tools. Noah Gift demystifies all the concepts and tools you need to get results—even if you don’t have a strong background in math or data science. Save 30% with the code, “KITE”.

About the Author:

This article originally appeared on Kite.com.

(Reprinted with permission)

 

Dollar roars on geopolitical tensions; Oil turbocharged

Investors across the globe are entering the trading week on a mission to avoid riskier assets following drone attacks on Saudi Arabi’s oil fields over the weekend.

This bombshell development could not have come at a more painful time for the global economy currently engaged in a gruelling battle with trade developments and geopolitical risks. Heightened geopolitical tensions in the Middle East should accelerate the flight to safety ultimately sending investors rushing towards safe-haven assets like the Japanese Yen, Gold and Dollar.
We can already see this sentiment in the Dollar Index (DXY) which has jumped 0.77% as of writing to trade above 98.60. While the DXY is positioned to blast higher amid the risk-off mood, where prices conclude this week will be heavily influenced by the Federal Reserve meeting on Wednesday.

In regards to the technical picture, the DXY is bullish on the daily charts. A strong daily close above 98.60 should inspire a move towards 99.00 and 99.20.



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Are Oil bulls really back in town?

The dynamics influencing oil prices are set to swing back to supply-side factors after the attacks on key Saudi Arabia oil facilities removed 5.7 million barrels from the markets.

Oil prices were explosively bullish today, rising 20% during early trading before later surrendering almost half of the gains. Given how the absence of 5.7 million barrels is equivalent to 50% of Saudi Arabia’s Oil production and roughly 5% of global supplies, the outlook for oil tilts to further upside on this massive supply disruption. The longer it takes for Saudi Arabia’s oil production to recover, the stronger the argument for higher oil prices in the short to medium term.

Whether Oil can appreciate towards $100 will depend on many factors, ranging from global growth, US-China trade developments and OPEC +. I still believe that as long as demand remains missing from the equation, the upside for oil will be capped down the road.
Looking at the technical picture, WTI Crude is bullish on the daily charts with prices trading around $60.90 as of writing. A Daily close above $60 should inspire a move towards $63.80 and $65.00.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.