The US dollar is declining relative to a basket of major currencies. The dollar index (#DX) closed in the red zone (-0.48%). Demand for the US dollar has fallen significantly, but for the “safe haven” currencies has grown amid the spread of coronavirus. Thus, the Japanese yen increased to a monthly high against the US currency. Hopes that the outbreak of coronavirus can be contained within China have faded since the infection has spread throughout the world. Now financial market participants are almost certain that the US Federal Reserve will cut its base interest rate next month. Global stocks could record the maximum weekly decline since the financial crisis in 2008, as the spread of infection raised concerns about the economic recession in the US and the EU.
In addition, optimistic economic data from the US were published yesterday, which nevertheless could not support the US dollar. So, core durable goods orders increased by 0.9% in January instead of the expected growth by 0.2%. GDP (q/q) grew by 2.1% in the 4th quarter, which met the forecasts. Pending home sales index grew by 5.2% in January, while experts forecasted 2.2%.
The “black gold” prices have continued to decline. Currently, futures for the WTI crude oil are testing the $45.95 mark per barrel.
Market indicators
Yesterday, there were aggressive sales in the US stock market: #SPY (-4.49%), #DIA (-4.54%), #QQQ (-5.01%).
The 10-year US government bonds yield has fallen sharply again. At the moment, the indicator is at the level of 1.20-1.21%.
The Economic News Feed for 28.02.2020:
– Report on the labor market in Germany at 10:55 (GMT+2:00);
The EUR/USD currency pair shows a pronounced upward trend. The demand for greenback has decreased. Investors made a bet that the Fed may lower interest rates to compensate for the impact of the spreading coronavirus. Yesterday the growth of quotations exceeded 1%. Euro reached the round level of 1.10,000. The mark 1.09650 is a local support. We do not rule out further recovery of the single currency. We expect important economic releases from Germany and USA. Positions should be opened from key levels.
The Economic News Feed for 28.02.2020:
– German labour market report – 10:55 (GMT+2:00);
– Personal spending in the US – 15:30 (GMT+2:00).
The indicators signal the strength of buyers: the price has fixed above 50 MA and 100 MA.
MACD histogram is in the positive zone, which gives a signal to buy EUR/USD.
The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which also indicates a bullish sentiment.
Trading recommendations
Support levels: 1.09650, 1.09100, 1.08600
Resistance levels: 1.10100, 1.10500
If the price fixes above 1.10100, further growth of EUR/USD quotes is expected to 1.10400-1.10600.
Alternatively, the quotes could descend toward 1.09300-1.09100.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.28956
Open: 1.28811
% chg. over the last day: -0.14
Day’s range: 1.28694 – 1.28966
52 wk range: 1.1959 – 1.3516
Bearish sentiment prevails on GBP/USD currency pair. Sterling reached key lows (1.28550). The round level 1.29000 is already a mirror resistance. At the moment the trading instrument is consolidating. GBP/USD quotes have potential for further decline. We recommend that you keep track of the current information regarding the trade negotiations between the UK and the EU. Positions should be opened from key levels.
The Economic News Feed for 28.02.2020 is calm.
The indicators signal the sellers’ strength: the price has fixed below 50 MA and 100 MA.
MACD histogram is in the negative zone and continues to decline, which gives a strong signal to sell GBP/USD.
The Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.28550, 1.28000
Resistance levels: 1.29000, 1.29400, 1.29750
If the price fixes below 1.28550, expect the quotes to fall toward 1.28000.
Alternatively, the quotes could recover toward 1.29300-1.29600.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.33292
Open: 1.33906
% chg. over the last day: +0.43
Day’s range: 1.33789 – 1.34486
52 wk range: 1.2949 – 1.3566
Aggressive purchases are observed on the USD/CAD currency pair. During yesterday’s and today’s trades quotations growth exceeded 100 points. The CAD is under pressure from a significant drop in oil prices. The trading instrument found resistance at 1.34500. 1.34000 is the nearest support. USD/CAD quotes can grow further. We expect important economic reports from Canada. Positions should be opened from key levels.
At 15:30 (GMT+2:00) will be published data on Canadian GDP.
The indicators signal the strength of buyers: the price has fixed above 50 MA and 100 MA.
The MACD histogram is in the positive zone and above the signal line, which gives a strong signal to buy USD/CAD.
The Stochastic Oscillator is located in the overbought zone, the %K line crosses the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.34000, 1.33450, 1.33100
Resistance levels: 1.34500, 1.35000
If the price fixes above 1.34500, further growth of USD/CAD quotes is expected to the round level 1.35000.
Alternatively, the quotes could descend toward 1.33700-1.33500.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 110.401
Open: 109.590
% chg. over the last day: -0.72
Day’s range: 108.795 – 109.682
52 wk range: 104.45 – 113.53
USD/JPY quotes show a stable downtrend. During yesterday’s and today’s trades the yen added more than 150 points in price against the US dollar. Demand for safe haven currencies remains at a high level due to growing risks of further spread of coronavirus. Currently, USD/JPY quotes are consolidating in the range 108.800-109.300. We recommend that you pay attention to the dynamics of US government securities yield. Positions should be opened from key levels.
Mixed economic reports from Japan were published during the Asian trading session.
The indicators signal the sellers’ strength: the price has fixed below 50 MA and 100 MA.
MACD histogram is in the negative zone, which gives a sell signal for USD/JPY.
The Stochastic Oscillator is located in the oversold area, the %K line crosses the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 108.800, 108.400, 108.000
Resistance levels: 109.300, 109.650, 110.200
If the price fixes below 108.800, expect the quotes to fall toward 108.500-108.300.
Alternatively, the quotes could grow toward 109.700-110.000.
By OilPrice.com – Three of the most valuable metals in the world are so rare that they could become a factor in the difference between global technological dominance and military superiority on one hand, and the loss of superpower status on the other.
Yet, for all their critical importance, even the most powerful nations are struggling to secure a stable supply.
That’s because one of these metals is so rare that total historical production wouldn’t even cover your ankles in an Olympic-sized swimming pool
The second is even rarer than the first.
And the third … is so secretive that it’s almost impossible to put a market price on it at all.
#1 Platinum (Pt)
This metal is as scarce as gold, representing .005 ppm (parts per million) of the earth’s crust. But it isn’t exploited at even close to the volume of gold.
That’s because it’s hard to get at. There’s no surface-mining of platinum, although South Africa does have one very small open-pit mine that provides some 8 percent of the world’s platinum production.
All the gold ever produced in the world would fill three Olympic-sized swimming pools, while platinum would barely cover your feet in one.
But while gold has few uses aside from aesthetics and a safe haven for traders, platinum is critical.
Platinum is so rare and valuable that during WWII, it was declared a strategic metal, and the U.S. government banned its use in jewelry.
Today, it’s even more strategic than it was during the Second World War – and not just for military applications, either.
Platinum is critical for everything from computers and catalytic converters to optical fibers – and crucially, it’s used by automakers to reduce harmful vehicle emissions.
And its sister metal – palladium – is on a massive bull run right now. Palladium prices have risen an amazing 400 percent since early 2016 due to chronic under-supply and “relentless” industrial demand. That has led to a wide gap between prices for the sister metals, with over-supplied platinum struggling but now poised to gain lost ground.
Worldwide, estimates are that we have 69,000 metric tons of platinum reserves, and 95 percent of that is deep in the earth’s crust in South Africa. Miniscule amounts are to be found in Russia and North America, where it is mined as a by-product of nickel and palladium, respectively.
The platinum jackpot is South Africa’s Merensky Reef, and the biggest producer is Anglo Platinum (AMS:SJ) (OTCMKTS:ANGPY), which accounted for some 40 percent of all primary refined platinum, and 30 percent of total global production in 2017.
#2 Rhodium (Rh)
Rhodium is even rarer and more expensive than palladium. And it goes for five times the price of gold.
Rhodium has a high melting point and is pretty much immune to corrosion. That makes it a key element for use in anything that needs reflective properties, as well as catalytic converters.
This month alone, rhodium prices have surged over 30 percent, and one of its key drivers is its application in emissions rules, which is now stricter and pushing much greater demand for this precious rare earths element. Both diesel and gas engines need rhodium – and now more than ever.
Some analysts are calling it “the hottest trade of 2020”.
Data from S&P Global Platts suggests that over 80 percent of demand for rhodium and palladium comes from the automotive industry.
Again, the biggest producer is South Africa, followed by Russia and Canada. That’s because it’s produced largely as a by-product of platinum and palladium.
Cesium, was added to the critical commodities list by the USGS in 2018 and has several important uses in modern industry: It’s increasingly vital to the oil and gas industry because it’s used in cesium formate brines, which act as heavy mud for high pressure, high temperature offshore oil drilling. In other words, it lubricates drill bits and prevents blowouts.
Cesium isotopes are also responsible for the world’s time standard. That’s why they are used in atomic clocks for cell phone networks, the internet, Global Positioning Systems (GPS) and aircraft guidance systems. Cesium clocks are the most accurate known to man – accurate to about 1 second in 300 million years.
Cesium bromide is used in infrared detectors, optics, photoelectric cells, scintillation counters, and spectrophotometers, and the metal is also used in the glass for military-grade night vision goggles.
According to the USGS, the United States relied 100% on cesium imports in 2019. It’s hard to get a world market price on cesium because there is not much trading of this strategic metal, but according to the most recent Mineral Commodities Summary, one company offered 1-gram ampoules of 99.8% (metal basis) cesium for $63.00, a slight increase from $61.80 in 2018, and 99.98% (metal basis) cesium for $81.10, a 3% increase from $78.70 in 2018.
Strategic as it is, though, there are only three pegmatite mines in the world that commercially produce it: Tanco in Manitoba, Bitika in Zimbabwe, and Sinclair in Australia. Of these, Tanco and Bitika are no longer producing, and the stockpiles at Tanco and Sinclair are largely controlled by China.
So, not only is there limited production – there are a very limited number of companies in the cesium supply chain.
One is Sinomine Resource Group Co. Ltd, based in China and now the owner of the Tanco mine and Sinclair’s stockpiles, but a potential future competitor is now just emerging on the cesium scene: the relatively unknown Canadian junior miner, Power Metals Corp. best known for its major hard rock lithium deposit in Canada.
This company is sitting on what is hoped to become only the fourth commercial mine of its kind in the world, with 100 percent ownership in the Case Lake property in Northeastern Ontario, where it has made a discovery of a deposit which includes some high-grade cesium mineralization.
The company discovered the pegmatites at West Joe Dyke in August 2018, intersecting high-grade cesium mineralization in six drill holes when it was targeting lithium instead.
For cesium, it means the playing field could be strategically shifting away from what has already been lost to China and towards a new North American supply.
The timing is as critical as the precious metals themselves.
The United States effectively relies on foreign imports for 70 percent of its strategic metals, as indicated by a 2017 USGS report:
That’s no way to win world dominance in an age of advanced technology that would be crippled without these super metals.
As the world continues to evolve, a handful of companies are looking to ride the wave of growing demand…
Teck Resources (NYSE:TECK, TSX:TECK)
Teck could be one of the best-diversified miners out there, with a broad portfolio of Copper, Zinc, Energy, Gold, Silver and Molybdenum assets. Its free cash flow and a lower volatility outlook for base metals in combination with a potential trade war breakthrough could send the stock higher in H2 of this year.
Teck’s share price stabilized last year, and many investment banks now see the stock as undervalued. Low prices for Canadian crude and disappointing base metals prices weighed on Q4 earnings.
Despite its struggles, however, Teck Resources recently received a favorable investment rating from Fitch and Moody’s and will likely benefit from its upgraded score. “Having investment grade ratings is very important to us and confirms the strong financial position of the company,” said Don Lindsay, President and CEO. “We are very pleased to receive this second credit rating upgrade.”
Turquoise Hill Resources (NYSE:TRQ ,TSX:TRQ)
Turqouise is a mid-cap Canadian mineral exploration and development company headquartered in Vancouver, British Columbia. Its focus is on the Pacific Rim where it is in the process of developing several large mines.
The company mines a diversified set of metals/minerals including Coal, Gold, Copper, Molybdenum, Silver, Rhenium, Uranium, Lead and Zinc. One of the fortes of Turquoise hill is its good relationship with mining giant Rio Tinto.
Turquoise has seen its share price languish last year, and the successful development of its world-class Oyu Tolgoi project in Mongolia is of utmost important to the future of this miner.
Pretium Resources (NYSE:PVG, TSX:PVG)
This impressive Canadian company is engaged in the acquisition, exploration and development of precious metal resource properties in the Americas. Pretium has an impressive portfolio and if you can catch the stock while the price is right, there could be huge opportunity for upside. Additionally, construction and engineering activities at its top location continue to advance, and commercial production is targeted for this year.
With Pretium’s variety of assets, this mining giant is a key figure in Canada’s resource realm. Investors know a good thing when they see it and have definitely taken note of this company’s ambitious and forward-looking drive.
Magna International (NYSE:MGA, TSX:MG)
Based in Aurora, Ontario, Magna is a global automotive supplier is gutsy and innovative–and definitely tuned to the obvious future–clean transportation. A great catalyst is its development of a combo electric/hydrogen vehicle–a fuel cell range-extended EV (FCREEV). It’s not going to produce them (for now, at least) but plans to use the model to show off its engineering and design prowess and produce elements of the electric drivetrain and contract manufacturing. It’s insightful, forward-thinking and smart value/low cost for shareholders.
Agnico Eagle Mines Ltd (NYSE:AEM, TSX:AEM)
Canadian based gold producer, Agnico Eagle Mines is an especially noteworthy company for investors. Why? Between 1991-2010, the company paid out dividends every year. With operations in Quebec, Mexico, and Finland, the company also is taking place in exploration activities in Europe, Latin America, and the United States.
While Agnico primarily focuses on gold, it made this list because the world’s appetite for gold will never die. It is engrained in our culture, history and society.
By. Meredith Taylor
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Forward-Looking Statements
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that prices for cesium will retain value in future as currently expected; that PWM can fulfill all its obligations to maintain its properties; that PWM’s property can successfully mine commercial quantities of cesium; that the three properties the company is drilling are hoped to have similar finds as the strategically important Sinclair mine in Australia; that occurrences and indications of a commercially sized deposit become reality; that high grades found in samples are indicative of a high grade deposit; and that PWM will be able to carry out its business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that aspects or all of the properties’ development may not be successful, mining of the cesium may not be cost effective, the price of cesium may not stay high and it may never be profitable to mine cesium; PWM may not raise sufficient funds to carry out its plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper cesium; more production of Cesium could reduce its price; alternatives could be found for cesium; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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After the USD/JPY went for a test of the region around 2019’s yearly highs of 112.00/30, recent developments concerning the Coronavirus resulted in a sharp bounce from the massive risk-off hitting global financial markets.
While we expect volatility to stay elevated since the worst is probably yet come (the US CDC said that it wants to prepare the American public for the possibility that their lives will be disrupted in the US with the Coronavirus’ spread), a short-term push back above 110.00 could be coming.
Our take: if the Personal Spending data comes in better than expected, and above 0.3%, 10-year US yields (which just saw new all-time lows recently), could see a bounce, thus driving the USD/JPY higher.
But we are very cautious in regards to the sustainability of such a move: if the situation around the Coronavirus worsens again, and signs intensify that the Fed may be forced to go with a surprising “emergency rate cut” before their next meeting on March 18 (which is currently not in sight thus “surprising”), US yields could see another push lower, driving the USD/JPY sustainably back below 110.00.
Technically the mode stays bullish as long as we trade above 107.80/108.00:
Source: Admiral MarketsMT5 with MT5-SE Add-on USD/JPY Daily chart (between December 18, 2018, to February 27, 2020). Accessed: February 27, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the USD/JPY increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, in 2019, it fell by 0.85%, meaning that after five years, it was down by 9.2%.
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On Thursday, February 27, the euro was up at the close of trading. During European trading, bulls reached the MA line U3, situated at 1.1006. The main reason for the euro’s growth was investors’ move away from risky assets and stocks (since the euro and the yen are the funding currencies). Investors are concerned about the spread of coronavirus outside of China. The total number of infected exceeded 83,000 people. The current mortality rate sits at 3.4% of the total.
Brent fell 3.66%. Major US stock indices fell by more than 4%. Since February 20, the S&P index has fallen from a record high of 13.8%.
16:30 USA: Personal Spending (Jan), Core Personal Consumption Expenditure – Price Index (MoM) (Jan), Personal Income (MoM) (Jan).
17:15 USA: FOMC Bullard speech.
17:45 USA: Chicago Purchasing Managers’ Index (Feb).
18:00 USA: Michigan Consumer Sentiment Index (Feb).
21:00 USA: Baker Hughes US Oil Rig Count.
Current situation:
The EURUSD pair has reached the upper limit of the MA channel. The last time the price reached the U3 line was on August 6, 2019. The 135th degree is located slightly higher up, which also strengthened the resistance at 1.1010, with the U3 line now found at 1.1037. Since investors are afraid of a pandemic, and, against the background of continued falling stock indices, the 1.1040-1.1050 zone is likely to be tested. In most cases, the price rolls back to the balance line (Lb) upon reaching the U3 line, but growth is currently supported by crosses and the news about the coronavirus.
Pay attention also to the Fiber channel. After the breakthrough at 1.0930 (around the 67th degree), the price hit the 200%. The 300% level is found at 1.1071. A jump in moment is likely, but if the price deviates from the SMA 55, the price will either fall into sideways movement for two days or will begin to correct. If the situation in the stock markets does not change for the better, then the EURUSD pair could well form three peaks along the U3 line. This is a favourite Bitcoin pattern.
By TheTechnicalTraders – Back in early 2018, after a dramatic rally in early January 2018, the US stock market collapsed suddenly and violently – falling nearly 12% in a matter of just 9 trading days. Our researchers asked the question, is the current collapse similar to this type of move and could we expect a sudden market bottom to setup?
Although there are similarities between the setups of these two events, our researchers believe there are two unique differences between the selloff in 2018 and the current selloff. We’ll attempt to cover these components and setups in detail.
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First, the similarities:
_ The contraction in market price just before the end of the year in 2017 was indicative of a market that had rallied to extended valuation levels, then stalled in December as the year-end selling took over.
_ The renewed rally in early January was a process of capital re-engaging in the market as future expectations continued to drive and exuberant investor confidence in the markets.
These two similarities between 2018 and 2020 seem fundamental.
Yet, there are differences that may drive a further price contraction event – beyond what we saw in 2018.
_ The US/China trade deal disrupted market fundamentals over the past 6+ months and established a more diminished function of global economics as the trade tensions continued
_ The foreign market capital shift process, where foreign capital poured into the US stock market over the past 12+ months and supported the US Dollar was a process of avoiding foreign market risks. This process trapped a large portion of foreign capital in the US markets prior to the 2020 collapse.
_ Global geopolitical functions are far more fragile than they were in 2018. After BREXIT was completed and prior to the signing of the US/China trade deal, a number of concerns existed throughout the world and are still valid.
_ The Wuhan Corona Virus has changed what global investors expect and how both supply and demand economic functions are being addressed world-wide.
The potential of an early price bottom setting up after this 2020 price collapse is very real. Yet, the ultimate bottom in the markets may be much lower than the 11% or 12% price decline that happened in 2018. The scale and scope of the Corona Virus event, should it continue beyond April 2020 (and possibility well into June or July 2020), could extend the price decline even further. Ultimately, this extended risk function may push the US and global markets to deeper lows before a bottom sets up – yet the outcome may be very similar.
After the double bottom in 2018 setup, a slow and stead price advance continued until the SPY price rallied to new highs in September 2018. A very similar type of price activity may take place in 2020 after the ultimate bottom in price sets up.
Our researchers believe the ultimate bottom in the SPY will likely happen near $251 – near the middle of the 2018 price range. Ideally, the event that takes place to create this price decline will likely happen in a “waterfall” event structure. This means we may see a series of 3 to 9+ day selloffs culminating in a major market bottom near $251.
If our research team is correct in this analysis, a bottom will likely form in the SPY and near $251 to $265 where and extended bottom pattern may setup. We may see a double-bottom type of pattern as we saw in 2018. Ultimately, we believe the bottom will setup sometime in mid-2020 and the remainder of the year will continue to support an extended price rally into the end of 2020.
Are we looking at a similar type of price event like we saw in early 2018? Ideally, yes. Although, we believe this downside price move will be deeper in terms of the total price decline (likely 18% to 25%) and will end when price valuation levels reach a point where global investors feel opportunity exists beyond risk.
Right now, we believe an incredible opportunity for skilled investors is present and that incredible market sector price rotations are taking place. We believe the devaluation process will move the markets lower by at least 15% to 20% or more. That suggests the bottom in the SPY is likely near $251 before we see any real opportunity for price to form a support base and begin to rally higher.
As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.
I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!
While attention is focused on the overall scale of COVID-19, from many of the leading specialists at Imperial College, Hong Kong University, and Harvard University. If this is a pandemic, which looks more and more likely by the day. Where is this pandemic currently in the pandemic cycle? Is it early in the cycle? Halfway through the cycle? Or is it at the end of the cycle?
If we take the Ray Dalio principle, “Wherein history has this happened before?”. Many times, we have to go back in time where the current generation experiencing a difficult event wasn’t even alive when the past event occurred or was too young to be aware of it. What historical examples can we look at, to see what has happened during past pandemic waves? The Government of New Zealand in their pandemic preparation has put together an analysis of four major pandemics going back more than 130 years.
While the first wave gets everyone’s attention as a pandemic takes hold. Commonly there is a second and third wave that has been far more serious than the first wave. As the former FDA Chair, Dr. Scott Gottlieb said in a recent interview, “the next 2-4 weeks will be the most important to see what happens next”. If history repeats, it will be the second wave that is most concerning.
Will silver be a store of value for investors if COVID-19 escalates further?
During the 1889-1892 pandemic, silver prices rose during the first phase of the pandemic to a high of $1.06/oz in 1890. As the pandemic got worse in 1891, the silver price then fell and continued to fall until the end of the pandemic in 1892.
The Spanish Flu saw the silver price accelerate during this time period, from $0.90 at the end of 1917, to a high of $1.36/oz by March 1919 when the pandemic finally subsided.
During the multi-year pandemic from 1957-1963, we saw silver prices rise from $0.91/oz to $1.31/oz in July 1963. The silver price did not rise until there was a pause in the pandemic between the second and final, third wave.
In the 1968-1970 pandemic, we saw the silver price fall initially from $2.34/oz to a low of $1.98/oz as the first wave took hold, before accelerating to a high of $2.75/oz during the summer months of 1968 before the second and final wave took hold in the winter of 1968 and in 1969. This final wave took the silver price down throughout the second wave. Silver bottomed at $1.69/oz in June of 1969. Mixed results throughout the pandemic in 1968-1970.
During this first phase of the COVID-19, we have seen silver head higher, but it is still early days.
Gold was pegged during all four of the pandemics outlined, and we view gold as being treated more like a currency today, particularly as we enter 2020-Q2, where we see slowing GDP growth and slowing inflation, pushing real rates down. Real rates falling is positive for gold.
Silver is not guaranteed to protect one’s wealth during a pandemic, as history has highlighted mixed results. It may provide trading opportunities.
A weakening home currency in countries that are negatively impacted by the pandemic could see silver prices rise in their home currency.
Slowing industrial demand will push demand for silver down, though if mines have to shut because towns that support mines could be impacted by the virus, then this will create shortages for silver. Still too early days to see what will happen. Slowing industrial demand seems more likely with PMIs continue to crash even before they took into account the impact of the virus. Shortages are a more wait and see.
Gold may be a better place to protect one’s wealth during a pandemic.
US Dollar? Possibly – The US Dollar rose as the tech cycle ended in 2000, which looks increasingly likely the tech cycle is ending in 2020 with Apple’s recent warning on shipments and temporarily shutting down stores.
Bitcoin? Possible
About the Author:
Paul Farrugia, BCom. Paul is the President & CEO of First Macro Capital. He helps his clients take advantage of cycle opportunities across all sectors and asset classes, for the long-term. He provides a checklist to find winning gold and silver mining producer stocks, to take advantage of the commodity cycle.
Disclaimer:
The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not designed to meet your financial situation – we are not investment advisors, nor do we give personalized investment advice. The opinions expressed herein are those of the publisher and are subject to change without notice. It may become outdated, and there is no obligation to update any such information.
As we can see in the H4 chart, the ascending tendency continues. After breaking the channel’ upside border and completing a Harami reversal pattern, XAUUSD has reversed; right now, it is still moving upwards. In this case, the upside target is at 1690.04. However, one shouldn’t ignore another scenario, according to which the instrument may return towards 1636.30.
NZDUSD, “New Zealand vs. US Dollar”
As we can see in the H4 chart, the descending channel continues. After completing an Inverted Hammer reversal pattern close to the support level, NZDUSD is reversing. We may assume that later the price may reverse, correct towards the channel’s upside border, and then resume falling. In this case, the downside target may be at 0.6248. At the same time, one shouldn’t exclude an opposite scenario, according to which the instrument may grow to return to 0.6355.
GBPUSD, “Great Britain Pound vs US Dollar”
As we can see in the H4 chart, GBPUSD has formed several reversal patterns close to the support level, such as Inverted Hammer. Possibly, the pair may reverse and return to 1.3011. Later, the market may continue growing towards the next resistance level. However, there is another scenario, which implies that the instrument may fall to reach 1.2817.
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.
AUDUSD is trading at 0.6554; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 0.6605 and then resume moving downwards to reach 0.6480. Another signal to confirm further descending movement is the price’s rebounding from the resistance level. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6625. In this case, the pair may continue growing towards 0.6705.
NZDUSD, “New Zealand Dollar vs US Dollar”
NZDUSD is trading at 0.6293; 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 0.6305 and then resume moving downwards to reach 0.6240. 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 0.6355. In this case, the pair may continue growing towards 0.6445.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is trading at 1.3338; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.3290 and then resume moving upwards to reach 1.3425. Another signal to confirm further ascending movement is the price’s rebounding from the support level. However, the scenario that implies further growth may be canceled if the price breaks the cloud’s downside border and fixes below 1.3225. In this case, the pair may continue falling towards 1.3155.
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 US dollar shows mixed results against a basket of major currencies. The dollar index (#DX) closed with a slight increase (+0.04%). Traders are closely monitoring the spread of COVID-19. WHO said yesterday that coronavirus spread outside of China much faster than in the country itself. On Thursday, the authorities of the world expanded measures to combat the potential pandemic of the coronavirus. The United States and South Korea have postponed joint military exercises to limit the spread of the virus that appeared late last year in China.
Trading activity and volatility on currency pairs with the Euro and the British pound increased significantly before trade negotiations between the UK and the EU, which are scheduled for March 2. However, traders are still worried that the recent harsh rhetoric on both sides could make negotiations unlikely to go smoothly. Michel Barnier, the EU’s Chief Negotiator, said the bloc would not agree to the deal “at any price.”
The “black gold” prices have continued to decline. At the moment, futures for the WTI crude oil are testing the $47.80 mark per barrel.
Market indicators
Yesterday, there was a variety of trends in the US stock market: #SPY (-0.37%), #DIA (-0.35%), #QQQ (+0.52%).
The 10-year US government bonds yield fell sharply again. At the moment, the indicator is at the level of 1.29-1.30%.
The Economic News Feed for 27.02.2020:
– Statistics on durable goods orders in the US at 15:30 (GMT+2:00);
– US GDP data at 15:30 (GMT+2:00);
– Pending home sales in the US at 17:00 (GMT+2:00).
