coininvest.com

  • Shop
    • Privacy-Policy
    • Imprint
  • Archive
    • Favorites
  • German Blog
  • French Blog
  • Italian Blog
  • Charts
You are here: Home / Analysis / Coininvest round-up Monday 3rd October 2022

2022-10-04 by Rhona O’Connell

Coininvest round-up Monday 3rd October 2022

We’ll take this most recent market assessment also as a range of charts and bullet points as I was on leave last week

  • Gold caught a bid towards the end of last week as the Bank of England came out in opposition to the UK Government’s fiscal policy and announced bond purchases to take some heat out of the markets’ turmoil.
  • Generally speaking the UK is a minor player where economic-political issues are concerned with respect to gold, but this time the dislocation caused a rally, which has held.
  • The UK Government may have scrapped the prosed abolition of the 45% marginal tax rate, but the key fears in the markets are still liquidity and margins. So the Bank of England restored some order, not just because of the fiscal policies, but the risks to liability-driven instruments, which were designed as hedging instruments for financial institutions such as pension funds, and this risk was forcing pension funds to sell gilts to met margin calls.
  • These elements all contributed to market uncertainty and for once, given the performance of recent weeks, gold responded to the upside.

In price terms, this means the following:

  • The downtrend established in the second week of August has not been disrupted, despite five consecutive gold up-days from its low of $1,614 a week ago to $1,660-1,670 now.
  • The decline since then has rebounded through the first Fibonacci retracement level (23.6%) but it struggling to get much further.
  • Silver has outperformed after a late sharp move in this rally, which also suggests something of a return more normal conditions.
  • The ratio has dropped to 83, the lowest since early April.
  • UK demand for gold bars and coins has strengthened enormously in recent days as sterling gold prices rose by 5% in a week, before the Government’s U-turn this morning (Monday)

In the United States (unusual for the States to take a back-seat to the UK!) bond yields have been dropping:

  • This follows a sharp rise over the previous quarter, a weaker than expected ISM Manufacturing survey (down to 50.9 from 52.0, but at least still in positive territory)
  • And a weaker than expected construction number (-0.7% month-on month) weighed on sentiment. Further pressure came from the ISM new orders number, at 47.1 after 51.2 in August.
  • The CFTC figures for last Tuesday 27th September, just before gold started rallying, showed it to be still friendless, with net shorts increasing again, to 134t to generate the largest net short since November 2018. No doubt that has been reversed since. Silver had seen some short covering, and closed at a net short of 1,301t (see charts)

Gold in Dollar terms, year-to-date

Source: Bloomberg

Gold in local currencies, year-to-date

Gold, the moving averages, the MACD and the RSI

Source: Bloomberg, StoneX

The US yield curve. Today and one month ago

Source: Bloomberg, StoneX

Gold, Silver; the Ratio and the Correlation

Source: Bloomberg, StoneX

Gold and the S&P; Correlation

Source: Bloomberg, StoneX

Gold and Silver COMEX positioning, tonnes

Gold: –

Silver: –

Source for positioning charts; CFTC, StoneX

The bond market’s fed funds target projection; peak of 4.4% in March next year. Too benign? Recent figures may suggest not

Source: Bloomberg

Source: Bloomberg, StoneX


Filed Under: Analysis, Markets Tagged With: CFTC, COMEX, Gold, Gold Price, Silver, UK, United Kingdom, United States, USA

About Rhona O’Connell

Rhona O’Connell
Head of Market Analysis, EMEA and Asia regions
StoneX Group Inc.
www.stonex.com

Share this article by Email
  • Facebook
  • Instagram
  • Pinterest
  • Tumblr
  • Twitter
  • YouTube

Coininvest round-up Monday 6th February 2023

Coininvest round-up Monday 30th January 2023

Coininvest round-up Monday 23th January 2023

Coininvest round-up Monday 16th January 2023

Coininvest round-up Monday 9th January 2023

CoinInvest round-up Monday 19th December 2022

Copyright © · CoinInvest.com · Datenschutz · Impressum

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Reject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT