Gold Now Runs 10% in a Week With CPI Tomorrow
Gold is near its highest in two months. Price has run about 10% off the early-August low near 4,016. The trend is up and the momentum behind it is real.
The right the necessary posture going into tomorrow is patience. There's really no need to front-run a position when we truly don't know what the CPI read will be.
A cool print likely means continuation, and probably without offering a comfortable entry along the way. The next resistance is the 4,500 handle where the 200-day sits, roughly 2.2% above here. If that is the path, there is nothing to do but watch and wait for the pullback that eventually comes.
A hot print puts pressure on gold, and that is what creates the opportunity. The levels I would be watching in that case are 4,300 and 4,200.
Again, patience will pay off if you're not in the trade and looking to jump in. September hike odds are 48% and December sits at 78%, so this is not a settled picture.
read the full article here.
— Alan
Gold is near its highest in two months. Price has run about 10% off the early-August low near 4,016. The trend is up and the momentum behind it is real.
The right the necessary posture going into tomorrow is patience. There's really no need to front-run a position when we truly don't know what the CPI read will be.
A cool print likely means continuation, and probably without offering a comfortable entry along the way. The next resistance is the 4,500 handle where the 200-day sits, roughly 2.2% above here. If that is the path, there is nothing to do but watch and wait for the pullback that eventually comes.
A hot print puts pressure on gold, and that is what creates the opportunity. The levels I would be watching in that case are 4,300 and 4,200.
Again, patience will pay off if you're not in the trade and looking to jump in. September hike odds are 48% and December sits at 78%, so this is not a settled picture.
read the full article here.
— Alan
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🔔 Closing Bell - Question of the Day
When the Fed signals a more hawkish path and the dollar strengthens, what's the typical near-term effect on dollar-denominated commodities like oil and gold?
When the Fed signals a more hawkish path and the dollar strengthens, what's the typical near-term effect on dollar-denominated commodities like oil and gold?
Anonymous Quiz
45%
Downward pressure — but commodities and the dollar are only loosely correlated, not directly linked
11%
Downward pressure — though the effect only shows up with a multi-week lag
44%
Downward pressure — costlier for foreign buyers in local currency terms
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GBPUSD Now Faces a Critical GDP Print at Key Resistance
GBPUSD is trading just shy of the 1.3550 to 1.3620 resistance zone and roughly 0.7% above the 200-day.
Tomorrow's Q2 GDP likely decides of the resistance holds or if we start breaking through it. Consensus is 0.4% quarterly after 0.6% in Q1, with the Bank of England forecasting 0.3%.
What makes it asymmetric is what is already priced. The swaps curve carries roughly 50bp of further BoE tightening over twelve months, taking Bank Rate to 4.25%, which sits above the Bank's own neutral estimate while the economy runs below potential. A lot of hawkishness is in the price, so a miss likely does more damage than a beat does good.
A strong print probably takes this through 1.3550, and continuation rarely offers a comfortable entry. A soft print pressures sterling, and the 200-day near 1.3400 is the level I would be watching.
read the full article here.
— Alan
GBPUSD is trading just shy of the 1.3550 to 1.3620 resistance zone and roughly 0.7% above the 200-day.
Tomorrow's Q2 GDP likely decides of the resistance holds or if we start breaking through it. Consensus is 0.4% quarterly after 0.6% in Q1, with the Bank of England forecasting 0.3%.
What makes it asymmetric is what is already priced. The swaps curve carries roughly 50bp of further BoE tightening over twelve months, taking Bank Rate to 4.25%, which sits above the Bank's own neutral estimate while the economy runs below potential. A lot of hawkishness is in the price, so a miss likely does more damage than a beat does good.
A strong print probably takes this through 1.3550, and continuation rarely offers a comfortable entry. A soft print pressures sterling, and the 200-day near 1.3400 is the level I would be watching.
read the full article here.
— Alan
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US 2-Year Yield Now Falls as September Odds Hit 38%
US 2-year yield is at 4.193%, down roughly 5bp on the CPI print and holding below the ascending trendline drawn from the war-start low in March. When I marked this chart on August 4 it was testing that line. It has now broken it.
The print was benign. Headline rose 0.1% after June's 0.4% decline, annual slowed to 3.4%, and core came in at 0.2% monthly and 2.5% annually. September hike odds fell to 38% from 48%, with 26bp of tightening priced across the curve against nearly 30bp yesterday.
My hesitation is what the report measured. July energy fell 1.5% with gasoline down 2.9%. Brent traded to 90 this morning and WTI reached almost 84. If oil continues to creep up we could be see the inflation progress walked back.
The curve says the same thing. The front end took the relief and the 30-year near 5.23% barely moved.
PPI tomorrow.
read the full article here.
— Alan
US 2-year yield is at 4.193%, down roughly 5bp on the CPI print and holding below the ascending trendline drawn from the war-start low in March. When I marked this chart on August 4 it was testing that line. It has now broken it.
The print was benign. Headline rose 0.1% after June's 0.4% decline, annual slowed to 3.4%, and core came in at 0.2% monthly and 2.5% annually. September hike odds fell to 38% from 48%, with 26bp of tightening priced across the curve against nearly 30bp yesterday.
My hesitation is what the report measured. July energy fell 1.5% with gasoline down 2.9%. Brent traded to 90 this morning and WTI reached almost 84. If oil continues to creep up we could be see the inflation progress walked back.
The curve says the same thing. The front end took the relief and the 30-year near 5.23% barely moved.
PPI tomorrow.
read the full article here.
— Alan
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🔔 Closing Bell - Question of the Day
A trader with a 25% win rate can still be profitable over time if their average winning trade is meaningfully larger than their average losing trade.
A trader with a 25% win rate can still be profitable over time if their average winning trade is meaningfully larger than their average losing trade.
Anonymous Quiz
89%
True
11%
False
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USDCHF Today: Three Cool Prints and One Key Level
USDCHF is tapping into a key resistance zone. That zone also contains the 61.8% retracement of the late-July drop from 0.8207 to 0.8043, which gives it more additional weight
The data supports the downside. PPI was unchanged on the month against 0.2% expected, with the annual rate slowing to 4.7% from 5.5% and core easing to 4.2% from 4.7%. That follows a cool CPI and a payrolls report that lost 23,000 jobs with heavy downward revisions. EdgeFinder reads-10 on USDCHF which is an added confluence.
One caution on the re-escalation scenario. Higher oil lifts yields and the dollar, which could disrupt the idea.
Two ascending trendlines beneath price acting as support. I'm watching for a breakdown of those levels for continued downside. Quiet calendar until FOMC minutes Wednesday.
read the full article here.
— Alan
USDCHF is tapping into a key resistance zone. That zone also contains the 61.8% retracement of the late-July drop from 0.8207 to 0.8043, which gives it more additional weight
The data supports the downside. PPI was unchanged on the month against 0.2% expected, with the annual rate slowing to 4.7% from 5.5% and core easing to 4.2% from 4.7%. That follows a cool CPI and a payrolls report that lost 23,000 jobs with heavy downward revisions. EdgeFinder reads-10 on USDCHF which is an added confluence.
One caution on the re-escalation scenario. Higher oil lifts yields and the dollar, which could disrupt the idea.
Two ascending trendlines beneath price acting as support. I'm watching for a breakdown of those levels for continued downside. Quiet calendar until FOMC minutes Wednesday.
read the full article here.
— Alan
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Gold Analysis: Now Is The Time To Pay Attention
Gold may be slipping under the 4,365 to 4,382 support shelf after what looks like to be topping out at 4,449.
Worth noting where it turned. The 200-day sits near 4,495, so price rejected about 1% beneath it. That average has capped this market all year and it did its job again. This reads as resistance holding rather than a trend breaking.
The macro is getting progressively stronger for Gold. Payrolls contracted 23,000 with heavy revisions, CPI slowed to 3.4%, PPI came in unchanged with the annual rate down to 4.7% from 5.5%, and front-end yields have broken their war-era uptrend. Rate projections have gone from two and a half hikes to roughly one.
The 0.382, the 0.5, and the 0.618 fib levels sit below. I'm watching them closely!
Just like you can overpay for a house or a car, you can overpay in trading. I'd rather re-enter at a relative discount.
read the full article here.
— Alan
Gold may be slipping under the 4,365 to 4,382 support shelf after what looks like to be topping out at 4,449.
Worth noting where it turned. The 200-day sits near 4,495, so price rejected about 1% beneath it. That average has capped this market all year and it did its job again. This reads as resistance holding rather than a trend breaking.
The macro is getting progressively stronger for Gold. Payrolls contracted 23,000 with heavy revisions, CPI slowed to 3.4%, PPI came in unchanged with the annual rate down to 4.7% from 5.5%, and front-end yields have broken their war-era uptrend. Rate projections have gone from two and a half hikes to roughly one.
The 0.382, the 0.5, and the 0.618 fib levels sit below. I'm watching them closely!
Just like you can overpay for a house or a car, you can overpay in trading. I'd rather re-enter at a relative discount.
read the full article here.
— Alan
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🔔 Closing Bell - Question of the Day
Real yields rose sharply this quarter. Why would this pressure high-growth, non-profitable tech stocks more than value stocks?
Real yields rose sharply this quarter. Why would this pressure high-growth, non-profitable tech stocks more than value stocks?
Anonymous Quiz
24%
Growth valuations lean on distant cash flows — but real yields only affect bonds
11%
Growth valuations lean on distant cash flows — though this only holds in recessions
21%
Growth valuations lean on distant cash flows — but growth/value react identically
43%
Growth valuations lean on distant cash flows — more sensitive to the discount rate
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NZDUSD Now Bounces as the Fed's Hawkish Case Weakens
NZDUSD is bouncing off of key support.
What makes this pair clean is the divergence. The RBNZ is one of the last hawkish central banks, while the Fed is drifting the other way. Markets price about 85% odds of an RBNZ hike to 2.75% in September, and the bank keeps flagging the need to make policy less stimulative. July manufacturing expanded again.
The Fed side is the opposite story. Retail sales fell 0.6% today against 0.1% expected, the fourth straight miss after cooling CPI, cooling PPI, and a contracting jobs report. Rate pricing has gone from two and a half hikes earlier this year to one at most. Front-end yields are lower again.
One central bank leaning toward a hike, the other toward a hold. Those polar opposites make what could be a clean setup. Kiwi is the strongest currency today on the currency relative strength chart.
read the full article here.
— Alan
NZDUSD is bouncing off of key support.
What makes this pair clean is the divergence. The RBNZ is one of the last hawkish central banks, while the Fed is drifting the other way. Markets price about 85% odds of an RBNZ hike to 2.75% in September, and the bank keeps flagging the need to make policy less stimulative. July manufacturing expanded again.
The Fed side is the opposite story. Retail sales fell 0.6% today against 0.1% expected, the fourth straight miss after cooling CPI, cooling PPI, and a contracting jobs report. Rate pricing has gone from two and a half hikes earlier this year to one at most. Front-end yields are lower again.
One central bank leaning toward a hike, the other toward a hold. Those polar opposites make what could be a clean setup. Kiwi is the strongest currency today on the currency relative strength chart.
read the full article here.
— Alan
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DXY Analysis: The Fed Is Running Out of Options
DXY is at 99.515, sitting on support with the 200-day SMA just beneath at roughly 99.20.
Two paths and both end lower. Either this support holds and price rallies into the 100.20 to 100.60 resistance band before sellers take it from there, or the shelf gives way, the 200-day goes with it, and the flush continues. With the Fed's rate hike case weakening, I think the destination for DXY is lower, it's just a matter of which path it takes.
Retail sales are the fourth consecutive miss. Sales fell 0.6% against 0.1% expected, the largest drop since May 2025. That follows payrolls contracting 23,000 with 103,000 of downward revisions, CPI slowing to 3.4%, and PPI coming in flat with the annual rate down to 4.7% from 5.5%. Front-end yields are lower again today.
The EdgeFinder currently reads Very Bearish on the dollar.
read the full article here.
— Alan
DXY is at 99.515, sitting on support with the 200-day SMA just beneath at roughly 99.20.
Two paths and both end lower. Either this support holds and price rallies into the 100.20 to 100.60 resistance band before sellers take it from there, or the shelf gives way, the 200-day goes with it, and the flush continues. With the Fed's rate hike case weakening, I think the destination for DXY is lower, it's just a matter of which path it takes.
Retail sales are the fourth consecutive miss. Sales fell 0.6% against 0.1% expected, the largest drop since May 2025. That follows payrolls contracting 23,000 with 103,000 of downward revisions, CPI slowing to 3.4%, and PPI coming in flat with the annual rate down to 4.7% from 5.5%. Front-end yields are lower again today.
The EdgeFinder currently reads Very Bearish on the dollar.
read the full article here.
— Alan
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Try EdgeFinder free: https://bit.ly/4xrDjrQ
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🔔 Closing Bell - Question of the Day
If the market begins pricing in an earlier and larger series of rate cuts, longer-duration bonds should generally outperform shorter-duration bonds, all else equal.
If the market begins pricing in an earlier and larger series of rate cuts, longer-duration bonds should generally outperform shorter-duration bonds, all else equal.
Anonymous Quiz
65%
True
35%
False
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Euro Now Hits a Two-Month High as ECB-Fed Gap Widens
EURUSD is near a two-month high. Price is creeping up towards the 200-day SMA that'll act as resistance unless proven otherwise.
The has been some real policy divergence lately fueling the bid. Markets have cut Fed hike bets to about one this year after four straight soft US prints. The ECB is the other way, with roughly 84% priced for a 25bp hike in September. One bank leaning to a hold, the other to a hike.
EURUSD sits under its 200-day while DXY sits on its 200-day. They're basically the same chart and they're at the same inflection point.
read the full article here.
— Alan
EURUSD is near a two-month high. Price is creeping up towards the 200-day SMA that'll act as resistance unless proven otherwise.
The has been some real policy divergence lately fueling the bid. Markets have cut Fed hike bets to about one this year after four straight soft US prints. The ECB is the other way, with roughly 84% priced for a 25bp hike in September. One bank leaning to a hold, the other to a hike.
EURUSD sits under its 200-day while DXY sits on its 200-day. They're basically the same chart and they're at the same inflection point.
read the full article here.
— Alan
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Gold Now Sits Near Highs With Crowded Positioning
Gold is back near the 4,452 swing high. The 200-day sits above at roughly 4,490 to 4,500, still resistance. Price recovered almost the whole pullback from 4,331 without offering a deeper dip.
The macro for gold is still very strong. Four soft US prints in a row, cooler CPI, cooler PPI, a contracting jobs report, and weaker retail sales, have pushed Fed pricing toward a hold. Lower rates support a metal that pays nothing.
The problem is the entry.. Positioning looks crowded at these highs. A quick flush of that crowding could take Gold lower fast without breaking the macro backdrop. That potential flush could present an entry opportunity at solid price levels.
The retracements below are unfilled: The 0.382 at 4,286, the 0.5 at 4,235, and the 0.618 at 4,183.
Fed minutes Wednesday could also be a market moving catalyst.
read the full article here.
— Alan
Gold is back near the 4,452 swing high. The 200-day sits above at roughly 4,490 to 4,500, still resistance. Price recovered almost the whole pullback from 4,331 without offering a deeper dip.
The macro for gold is still very strong. Four soft US prints in a row, cooler CPI, cooler PPI, a contracting jobs report, and weaker retail sales, have pushed Fed pricing toward a hold. Lower rates support a metal that pays nothing.
The problem is the entry.. Positioning looks crowded at these highs. A quick flush of that crowding could take Gold lower fast without breaking the macro backdrop. That potential flush could present an entry opportunity at solid price levels.
The retracements below are unfilled: The 0.382 at 4,286, the 0.5 at 4,235, and the 0.618 at 4,183.
Fed minutes Wednesday could also be a market moving catalyst.
read the full article here.
— Alan
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