Everyone is talking about the ‘hawkish cut’ and the reweighting taking place in FX.
The strength of the USD should not be underestimated, it has seen GBP, AUD, EUR and NZD get pounded to multi-year lows.
It was even more painful when you factor in Powell’s testimony; his bumbling and inability to clarify the Board’s reasoning for cutting rates put an even bigger rocket under the USD and will have hurt positions.
However, since the FOMC meeting the dust has settled a bit. Market pricing of the Fed Funds futures has actually returned to levels seen pre the July 31 st meeting. The most notable part is the October 30th meeting is being price at an 82% of another cut.
This should filter into FX over the next period, make no mistake the higher the USD goes the bigger the risk setbacks build in markets. The Fed and the President for that matter will want to address this quick – accommodation is still coming.
However, there is another trade that is presenting here post the Federal Reserve – XAU
XAU’s initial reaction to the ‘hawkish cut’ was a swift move lower. However, this dip was quickly bid up by the market as its focus shifted to the economic implications of the Hawkish Fed. Sentiment also seen in US equities and the broader risk-off sentiment which supports our trade idea in gold, this being:
Long XAU – Entry: $1,425, Stop: $1,409 Target: $1,500 on break above $1,453
Over the past month XAU as broken out of its long-term wedge pattern formed in late July 2016 to August 2018. Creating a new trend line starting from the August 18 low to July 19 high, which has now created a $1,453 resistance level.
If we look at levels past the $1453 resistance XAU would effectively open up a new topside and the trend lines suggest there could be a continuation to a new level of $1,568 to $1,595 on a Fibonacci derivation. Thus a break here would see us adding to our trade.
Adding the technical to the fundamental justification an XAU long position could be advantageous.
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up Frank Holmes of US Global Investors joins me to talk about gold, the key driver that will likely take it higher and why we need to be paying more attention to the trendlines than the headlines. Don’t miss another great conversation with the well-traveled and highly respected Frank Holmes, coming up after this week’s market update.
Well, after months of presidential complaining, tweeting, and pressuring, Donald Trump finally got a rate cut from the Fed.
A lower interest rate was supposed to stimulate the stock market and make the dollar cheaper versus the currencies of exporting countries — thereby making U.S. products more competitive according to Trumponomics. Instead, stocks fell and the U.S. Dollar Index broke out to a two-year high following the Federal Reserve’s policy move on Wednesday.
Edward Lawrence Fox Business: And the Federal Reserve cuts interest rates a quarter of a percentage point, the interest rate range now at 2% to 2.25%. The Federal Reserve also announced that it would stop the roll off of its balance sheet two months early, starting on August 1st. Now the distinction there is that Treasuries will still be reinvested as they’re matured and that leaves the balance sheet at about $4.2 trillion.
Eamon Javers – CNBC: The President is not pleased with Jay Powell. Here’s the tweet from the President just a few seconds ago saying, “What the market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate cutting cycle, which would keep pace with China, the European Union, and other countries around the world. As usual. Powell let us down.”
Sara Eisen – CNBC: I mean, I think the question here is can the President actually do anything about it? And I never really have a clear answer on what the legality is.
Eamon Javers – CNBC: The President appointed Jay Powell, right? This is his guy. But he’s frustrated that he’s not going far and fast enough. And the question is a gray area of whether the President could fire a Fed chair.
It appears unlikely at this point that Trump will attempt to remove Powell from his position at the Fed. The bipartisan political backlash that would be sure to follow wouldn’t do anything to help his broader policy agenda on Capitol Hill.
Trump still hopes to reshape the Fed by getting his prospective nominees to the Fed Board of Governors confirmed. The most difficult one will be Judy Shelton, who has often advocated for a gold standard but is currently calling for more aggressive rate cuts by the Fed. She views easier monetary policy as a way to put the U.S. on a level playing field with the rest of the world as Europe, China, and Japan try to devalue their way to prosperity.
One way the Trump administration could pursue a currency devaluation without any help from the Fed is through direct intervention in foreign exchange markets. Believe it or not, the Treasury Department has a slush fund set up specifically for this purpose. It’s called the Exchange Stabilization Fund.
It need not check with the Federal Reserve or get permission from Congress in order to act. The Exchange Stabilization Fund has nearly $100 billion at its disposal to manipulate currency markets. And it’s all off budget. It reports to no one except the Treasury Secretary and President of the United States.
White House officials have been quietly debating whether to deploy the Treasury Department’s resources toward lowering the dollar’s exchange rate. Treasury Secretary Steven Mnuchin reportedly opposes the idea. He has thus far persuaded President Trump to avoid direct foreign exchange market interventions.
That doesn’t necessarily mean he will continue to stand by and watch other currencies depreciate against the dollar, thwarting his trade policy objectives.
On Thursday, President Trump announced his administration will impose additional tariffs on China. In response, the general stock market turned lower by the end of the day. So did the U.S. dollar.
The best performing asset class on the day ended up being gold mining stocks. Major mining indexes gained close to 5%.
Gold itself gained over a percent yesterday. As of this Friday recording, gold shows a weekly advance of 1.8% to bring spot prices to $1,444 an ounce.
The white metals are underperforming. Silver is off 0.9% this week to trade at $16.31 an ounce. Platinum is down 2.0% to trade at $851. And palladium took a huge tumble yesterday, losing more than $100 and falling below the gold price. Palladium currently comes in at $1,412 per ounce, lower by a whopping 8.1% for the week as of this Friday morning recording.
The mixed performance in metals markets is a largely a reflection of concerns about China and the potential for tariffs to crimp global growth. Industrial metals and energy commodities got hit hard on Thursday, while gold and gold miners benefited from safe-haven buying.
If Trump strikes a deal with China to avert new tariffs, economically sensitive commodities could rebound sharply. The bigger question is whether the dollar has put in a top. A lower-trending U.S. currency should ultimately help lift all hard assets.
Gold and silver have been performing quite well this summer in spite of the dollar rally. In fact, the metals have been rallying in terms of all major fiat currencies.
If the value of the Federal Reserve note heads lower into the fall at the same time as seasonal strength in demand for jewelry and coins kicks in, precious metals investors will have sound reasons to get ready for some big gains ahead.
Well now, without further delay, let’s get right to this week’s exclusive interview.
Mike Gleason: It is my privilege now to welcome in Frank Holmes, CEO and chief investment officer at US Global Investors. Mr. Holmes has received various honors over the years, including being named America’s Best Fund Manager by the Mining Journal. He’s also the co-author of the book The Goldwatcher: Demystifying Gold Investing, and is a regular guest on CNBC, Bloomberg, Fox Business, and also right here on the Money Metals podcast.
Frank, welcome back and thanks for joining us again today. How are you?
Frank Holmes: I’m great. And it’s wonderful to be back and see the gold markets have a new life and vibrancy to it.
Mike Gleason: Yeah, certainly a lot going on since we spoke to you back in the spring, and we’ll get into all of that. First off though, Frank, you recently wrote about the bond markets. In that article you noted that a quarter of all bonds traded worldwide have a negative yield. That’s simply extraordinary. In one out of four cases, a bond purchaser will pay the borrower to hold onto their capital. We’re having a hard time reconciling sentiment in the U.S., which is that the economy is strong and the future is bright, with what the global bond market seems to be saying. Investors who are ready to pay a borrower to hold their money probably aren’t doing it because they see opportunities for growth elsewhere. What do you make of this situation, and has this ever even happened before?
Frank Holmes: No, it’s unprecedented. And there’s even a whole philosophy being pushed by socialists of just having monetary policy so they can have the greatest socialist regulations galore, and they’ll just keep the economy going by managing the money. And eventually that just falls apart, that concept. But that’s full throttle. I think the new book that came out on economic, the new way of managing the economy, is applying this thought process. But I remember Ian McAfee years ago showed that in each time to move the Dow, move the economy, it took more and more debt. And eventually that debt starts to create an asset inflation. So, if you look at asset inflation, it’s quite substantial with this cheap debt.
But I think the bigger part is it’s the EU. And I write about these macro forces and I try to say simplify things as best you can. And when we look at China versus America, well, China and America are very significant because they’re 40% of global trade. So, when you have a punch out between these two countries, it’s very significant to the global economy. And if you have a problem between China and India, they’re 40% of the consumers of the world. When you look at that fact, being 40% of the world’s consumption, they have a high correlation to GDP per capita rising and consuming many different types of food products and clothes and, in particular, gold. And that’s what drives a big component of that “love trade.”
And then we have the sort of geopolitical, economic political philosophy that’s been growing out of the past 20 years out of years. And the creation of the EU and the euro has just led to a real significant growth in socialism and the policies and they control all this narrative. And you’re getting a backlash to it by different politicians, particularly in America. You see Trump as part of… he wants to drain the swamp is one of his expressions, but there’s been a pushback, and Brexit’s part of that pushback. Modi did some things that were incredible. And same thing in China, went after all the families that were stealing money and put them all in jail, had a big crackdown on illegal casinos, etc. So there’s something of a change taking place at very big macro forces.
Mike Gleason: Yeah, certainly something to keep an eye on. Speaking of yields, the Fed has just moved to lower interest rates, and now we have to start speculating about what their next move might be. And I’d like to get your assessment. What do you think? Is this move the start of a new cycle of rate reductions? Or will officials pause here for a while and see what happens?
Frank Holmes: I don’t know I’m set it in it, but I will share with you and the math, and I wrote about this going back to 1971, that anytime rates were dropped during an expansionary part of the economy, it was 100% probability the market’s up six to nine months out. So, we still have an expanding economy here, and there’s a concern it’s going to roll over quickly and we’re trying to stop that. I also think there’s the geopolitical on this with what the Europeans are trying to do, they’re all going to… the socialist mindset is go to zero interest rates and negative… real interest rates, negative. You go buy a 10-year government bond and they’re going to pay you one basis point and inflation is running at one and a half percent. You’re losing money over 10 years. And so that means that the euro’s going to go lower and they’re using that, so that’s the art of manipulation. So, the only way to compete against that, to help the U.S. economy keep it going, is drop the taxes for corporations to be competitive with Europe and Asia, now it’s got to make sure the currency doesn’t become too overpriced because it will affect the exports, they’re going to drop rates here.
So, I’m a big believer it’s going to happen. And if we go back to 2002, 2006, we had a great bull market in gold stocks, and the big reason for that is not only was gold going up, but the stock market was going up. And to really get big alpha in gold stocks, you need to have a combination of both.
Mike Gleason: Of course we want to get more of your thoughts on precious metals markets. We spoke last in April. Since then, we’ve seen the metals perk up quite a bit. Silver has gained about 10% and gold is up not quite 11%. So far, the move has been pretty under the radar. There isn’t a lot of gold coverage, say, on CNBC for example. And we’re seeing a decent number of clients who look at these higher prices as an opportunity to sell, not the beginning of a new trend higher necessarily. Given the number of false starts and the length of the bear market cycle we’ve been mired in, we understand skepticism. But what do you make of the recent move in metals? And might gold and silver investors expect between now and year-end?
Frank Holmes: Well, the old expression follow the trendlines not the headlines. And the trendline is very positive and constructive. And coming back onto this sort of global negative real interest rates, this is very bullish for gold. And we’re seeing this show up in more and more central banks increasing their exposure to gold, a lot of rookies coming in. And if you look at Europe, it’s Eastern European countries which are more conservative, Poland and Hungary, etc., they have been buying gold. And we’re seeing the Russians continue to buy their gold, and we’re seeing China continue to buy gold. So, I think that these negative real interest rates, it’s a very bullish scenario for gold. And last time we had gold hit $1,900, what people don’t realize is that the 10-year U.S. government bond was minus 300 basis points. That was the yield. Inflation was spiked that high. And real interest rates in the U.S. went positive. That is, what was the government paying on the 10-year money minus the CPI numbers are positive or negative is the real interest rate model. And then it went to plus 200 basis points. Well, gold fell to around $1,000, and now it’s been rebounding back as rates are going negative again.
So, that’s what they call the “fear trade.” And when the U.S. dollar, which is the biggest economy in the world, all of a sudden starts going in that direction, negative interest rates while the rest of the world is, it propels gold and gold can easily go back to $1,900. And it just takes a while, and you’re right, you’re absolutely right, that a lot of times the headlines are on other news, it’s not really bullish on gold. And there’s a natural propensity for New York to be anti-gold, even when you have great hedge funds coming out and owners of these players coming out and saying they’ve increased their exposure to gold. Each month there’s some new hedge fund this year that’s a billionaire that’s increased their exposure to gold.
Mike Gleason: In our view metals are continuing to fight headwinds from the equity markets. Yes, both metals and equities are performing well here, but that’s been limited to, say, the last three months or so. In general, it has been hard for metals to get anything going when sentiment is for risk on. But perhaps we have that wrong here. Maybe over the past three months we’ve been seeing more positioning around the inflation trade, perhaps more people are going to bet on dollar weakness and we’ll see metals and stocks continue to move higher together. What do you expect as to the relationship between stocks and metals in the months ahead, Frank?
Frank Holmes: I mentioned earlier that whenever you have an expanding economy and you drop rates in the U.S., it is very bullish for stocks. And if you have negative real interest rates, it’s very bullish for gold. So, having an expanding economy is bullish for stocks and negative rates are bullish for gold and silver, guess what? Gold and silver stocks are going to rip. And they’ve done that. Our gold equity ETF is up 40% year to date, and it’s crushed every other active gold fund manager, and it’s also crushed the other ETFs that are out there.
Mike Gleason: Yeah, that’s obviously been a great thing over the last few years. You follow the mining industry very closely. I know that’s kind of what’s spurred you on to launch the GOAU Fund. Talk about the miners in general and then also more about GOAU.
Frank Holmes: Well, I think on the miners end is it’s very hard for them, I think they’re going to have to do more acquisitions. Globally, there’s been very few mega discoveries. That’s become a real challenge. And the grades are falling for copper and gold and silver. I think that we have actually peak gold. Outside of recycling of gold, you can’t recycle oil, but you can recycle gold. I think that it’s pretty well peaked. And any pickup in huge demand globally, you can see the imbalance of supply and demand. There are points that are really important for investors to look at. And you’re seeing it percolate now in speculation because there’s lots of junior stocks that are up about 200% with getting any drill hole results. A year ago this wouldn’t happen. So, sentiment on speculative money is now looking at good results and plowing in, taking on speculative capital and going into them.
I think one of the smartest guys out there is Eric Sprott. He basically built, in a bear market, Kirkland Lake, retires as chairman and cashes out, he made $800 million. And now he’s peeling off that stock and he’s becoming one of the biggest single investors in mining districts and buying companies. And he’s already spent, I think in the past couple months, $140 million in exploration in brownfield developments. He’s made an investment in a company called Goldspot that recently went public, which I became the chairman, and we both have a big position in this company. And what are they doing? They’re doing AI and machine learning on exploration data to try to de-risk exploration so they can find these projects better. And I think that that’s going to be like fracking is for oil and some of the junior exploration companies that get royalties on that business. And as you know, I love royalty companies. Our GOAU is 30% (made up of) royalty companies because it’s a superior business model.
Now, when we look at a lot of the gold stocks that are in the GDXJ, they’ve raised capital or they’ve done mergers, and it’s really been diluted for investors. And the world today has changed dramatically, that 70% of all buying and selling is quant funds, and quant funds focus on the value per share, not the total gross value. So, we’ve had these stupid mergers go through or acquisitions you could call them, and they say, “Oh, our top line has grown dramatically,” but on a per share basis, it’s declined. Their reserves in cash flow have declined. Those stocks get put into a penalty box and money won’t go into them. So, what we did is we created an ETF that only bought 25 of those names where those stocks met these five key factors, and each quarter we recalibrate and rebalance them, and we basically call high-grading, those stocks are either the cheapest on a relative basis, on reserves per share, production per share, cash flow and revenue per share. And then we look at those companies that have momentum, where the last quarter’s above the four quarters in revenue, the last quarter of cash flow’s above four quarters, and you buy those basket of stocks. And historically, they outperform just a market cap-based index like the GDX or GDXJ.
Mike Gleason: Yeah, I love what you’re doing there with that, and especially the weighting that you have on the royalty companies. I love those as well, especially just look what they’ve done over the last few years when it was a bear market. The royalty companies, it’s just a superior business model it seems.
Well, as we wrap up here, Frank, any concern over maybe the fact that gold has maybe petered out a little bit or not busted higher once it crossed through $1,400? Some were expecting that it would just rise to $1,500 and be off to the races, but it hasn’t necessarily happened. How do you view that?
Frank Holmes: In my crypto-space business, which I launched the industrial scale crypto mining company called HIVE Blockchain, I really noticed for the first time the assault on Bitcoin that takes place at the Bank of International Settlements, which would rather have worthless central banks from Venezuela clearing through them, and promoting fiat money, than they would Bitcoin. And they’re so vicious the way they’ve articulated this story that I started digging deeper and found out that they’re also very much anti-gold, but they’re not as vocal about it. And it involves so often with the gold swaps. So, I think there’s suppression. And I know it’s now come out with some cases, they’re showing that in court and there’s been some judgments against it, of spoofing the market. There’s a new event that took place today on Bank of Nova Scotia, a former trader that was spoofing the gold market got charged. Morgan Stanley’s trader got charged for spoofing the market, found guilty.
So, I think that one reason why it’s not going to take off radically and quickly, but it’s going to have that nice slow climb, is because people like the Bank of International Settlements, which is the central bank of central bankers, basically want to have this rollover of this cheap paper, and almost play, “Hey, there’s no problem here because we can keep rolling over and if gold takes off, and that country’s currency, then all of a sudden it makes that ability to roll over paper money more difficult.
Mike Gleason: No problem. Yeah, very well put. It’s obviously the anti-paper money, anti-fiat money, and of course that’s why the powers that be in the central banks don’t want to see gold doing well. But there’s only so much they can do to really rein it in and hold it down.
Frank Holmes: So, I keep recommending with that silver, silver, silver. If you tell everyone and they buy silver coins and give them to your children and their grandchildren, give them to your employees for the most valuable employee of the month or the year, give away those silver coins, because they never get rid of them, they hold onto them, and eventually that silver will go back to $50.
Mike Gleason: I agree. Lots of value there in silver when you look at the ratio compared to gold.
Well, we’ll leave it there. Thanks, Frank. Look forward to catching up with you in a few months as we look at this all unfold. And then as always, please fill our listeners in on your firm, US Global Investors, and then also mention how they can find the great Frank Talk Blog that we all enjoy so much.
Frank Holmes: You’re so kind. Thank you very much for your generous recommendations. It’s simple, it’s USfunds.com. And you subscribe to the Investor Alert and the Frank Talk blog, it’s my travels around the world, meeting interesting people. And then every week we have a swat approach of the capital markets of different asset classes. So, I highly recommend it. It grows every week, it’s free, and we have I think 50,000 readers in 180 countries.
Mike Gleason: Well, great stuff. Thanks again. I hope you enjoy the rest of your summer, Frank. And we’ll catch up very soon. Take care.
Frank Holmes: Happy investing.
Mike Gleason: Well that will do for this week, thanks again to Frank Holmes CEO of US Global Investors and manager of the GoAU Gold Fund. For more information the site is USfunds.com. Be sure to check out the previously mentioned Frank Talk blog for some great commentaries on gold and other related topics. Again, you can find all of that at USfunds.com.
Mike Gleason: And check back here next Friday for our next Weekly Market Wrap Podcast. Until then, this has been Mike Gleason with Money Metals Exchange. Thanks for listening, and Merry Christmas everyone.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.
Gaia Grow Corp. CEO Frederick Pels speaks with Peter Epstein of Epstein Research on the day his company begins trading on the TSX Venture Exchange.
Gaia Grow Corp. (GAIA:TSX.V) (formerly Spirit Bear Capital) announced that effective August 1, its shares will be trading on the TSX Venture Exchange. Shares outstanding = 200.2 million. A July, 2019 capital raise was completed at $0.10, market cap = $20.2 million. (Note: ~124.7 million [~62%] of outstanding shares are locked up under various escrow agreements). This company comes by way of a Reverse Take Over (RTO).
Investors should review all applicable SEDAR filings and company press releases before investing in a RTO.
Peter Epstein & Epstein Research [ER], together [ER], have no former or existing relationship with any person or company mentioned below. However, at the time this interview was posted, [ER] was negotiating to secure Gaia Grow as an advertising client. While Gaia is not an advertiser on [ER] as of August 1, 2019, please consider [ER] biased in favor of the company. As of Aug. 1, Peter Epstein owned no shares, options or warrants in Gaia, or its predecessor company, but he may acquire shares in the open market.
Quick, name the top 3 #hemp / #CBD players
By now most investors know that there are [#cannabis / dispensary] stocks, and [#hemp / #CBD] stocks. Cannabis stocks include Licensed Producers (LPs) like Canopy Growth and Aurora Cannabis, and Multiple State Operators (MSOs)that sell cannabis through dispensaries in the U.S.companies like Curaleaf and Green Thumb Industries. A MSO is the U.S. version of a Canadian LP.
Then we have the hemp / CBD players . wait, where are my hemp and CBD names? Ahh, oh, here we go, Charlotte’s Web, # 9 of the top 50 . and next is . silence. Unless one accepts processing companies like Medipharm, who primarily extract CBD from acquired hemp, there’s only one large publicly traded hemp cultivation company on the planet!
Addressable market, stupid
Cannabis companies outnumber hemp-focused names by 10 or 12 to 1, implying that demand and acceptance of cannabis by users and various legal and political entities must be very high. Yet this simply is not the case. Cannabis is still a tough sell in most of the world.
Think about the global market for CBD (with < 0.3% THC). What percentage of adults might use CBD in its many forms for preventative health measures, specific aliments, or health and wellness? I estimate 60%75% could be consuming CBD regularly, or at least occasionally. By contrast, cannabis (with > 1% THC) is used in only two ways, recreationally and medically.
What percentage of adults might use cannabis? I estimate just 15%30%. Zero % of children, Zero % of pets. Finally, CBD is legally available in far more countries and jurisdictions than cannabis. Therefore, in my opinion, CBD demand next decade could be > 5x that of medical and recreational cannabis combined.
With that in mind, I interviewed Frederick Pels, CEO, chairman & co-founder of Gaia Grow Corp. (TSX-V: GAIA). Fredrick is very active in the cannabis / hemp space in Canada. He and his partners were early champions of medical cannabis, successfully advocating for its wider use and acceptance.
His prior company, the Green Room, was a leader in medical cannabis supply, industry best practices and education. The Green Room helped form, and get passed, many of the rules and regulations that make medical cannabis safe, affordable and accessible today. Fredrick and his team made valuable connections with people and companies in agriculture, finance, legal / compliance, cannabis, hemp, extraction and related sectors. The following interview was conducted by phone & email from July 26 to July 31st. {corporate website}
Peter Epstein: Fredrick, thank you for your time. Please give readers the latest snapshot of Gaia Grow Corp.
Frederick Pels: Sure. We have a strong management team and board, supportive shareholders, deep roots in the community and tremendous contacts in agriculture, finance and banking. We have vast experience in the Canadian cannabis and hemp space dating back more than 5 years. We understand how to navigate the increasing number of rules & regulations that cannabis & hemp growers face, because in many cases we helped develop them!
Most important, although there are other hemp / cannabis assets and opportunities held by Gaia Grow, our only active operation is a 1,494-acre crop of hemp plants that are about a month old and a half foot (15 cm) tall. Harvest is expected at the end of September or early October.
Peter Epstein: Can you tell us about co-founder James Tworek?
Frederick Pels: Yes, of course. James is a director and co-founder. He has a strong background, over 20 years’ experience, in banking and finance. He was a partner at a mortgage brokerage and then in a commercial development fund. In 2016, James worked on corporate finance contracts in the Canadian Medical Cannabis sector, giving him hands-on experience in early-stage development financing and capital raising.
Those roles make him well versed in corporate finance, mezzanine funding, equity-based lending and business start-ups. James’ experience in raising capital has brought him success in structured finance (including global deals) and he has built strong business relationships with family offices, private equity and venture capital firms.
Peter Epstein: Your recent background and experience is in medical cannabis, yet Gaia Grow is actively pursuing hemp. Is hemp a better investment opportunity than cannabis?
Frederick Pels: First and foremost, I’m an entrepreneur, a business owner, so my aim is to satisfy an under-served or un-met need. To me, hemp seems better positioned than cannabis, but Gaia Grow is looking at various cannabis situations as well. We think the opportunities for a small company to grow very rapidly are much greater in the hemp space than in cannabis.
Peter Epstein: What can you tell us about Gaia Grow’s hemp crop in southern Alberta?
Frederick Pels: Everyone is excited, seeds arrived in the second week of June and it was a very rainy spring great conditions for seed germination! The process of fertilizing, seeding & rolling the expansive 1,494.4 acres was spread out over two weeks. Thanks to intermittent rains, we are pleased to report that the crop has started off well.
I refer you to a quote from James in our most recent press release:
Gaia’s President James Tworek commented, “Gaia’s 2019 crop is planted and off to a great start. We will continue to monitor progress and work with our farmers, contract harvesting, and agronomy teams to optimize timing of harvest, currently estimated to be at the end of September / early October. In the meantime, Gaia’s management team is working diligently to firm up contracts with off-take partners to ensure a successful sale and extraction process of the harvest.”
Peter Epstein: What are your plans for your maiden hemp crop? Is there demand for 1,500 acres of hemp?
Frederick Pels: Yes, there’s tremendous demand! We can either sell the entire crop as biomass on a per acre basis, which would be the easy way to go, or get our biomass processed into higher value CBD extracts. We don’t have any extraction equipment, so a third party would have to do it. If the crop develops as expected, we think we could sell it for $3,000-$5,000 per acre.
However, if we choose a CBD extraction path, which is more complex and logistically difficult, then we could potentially generate a multiple of the revenue derived from selling the entire crop. Timing is a large part of the issue this year. Next year we fully expect to have an extraction path nailed down.
Peter Epstein: Is there a lot of crop risk between now and harvest?
Frederick Pels: Yes, there is certainly some degree of risk, there always is in agriculture. However, we have a well-respected consulting group managing the grow. And, most of the severe weather is behind us. Frost in late September or early October is a concern, but by then the plants should be fairly robust. We looked into crop insurance, but the first few quotes we received were unattractive. Recently we starting negotiating with a party that we think we could possibly come to terms with.
Peter Epstein: Is Gaia looking to acquire any properties or assets?
Frederick Pels: Yes, absolutely. Interesting opportunities are presented to us almost daily. We see great potential to acquire assets at very attractive valuations in the industrial heartland, where communities are suffering from high unemployment and a low tax base. Having a company like Gaia Grow come into a small town would go a long way towards revitalizing the area with new jobs and investment.
Peter Epstein: Gaia Grow recently raised over $4 million in equity capital. What will the funds be used for?
Frederick Pels: Some of that money was spoken for. We planted hemp seeds on just shy of 1,500 acres over the course of about two weeks and have a consulting group managing the crop. We have operating expenses to pay. But, make no mistake, we want to grow this company. Capital remaining from the $4 million raise will be added to cash flow generated from our crop.
Once we’re done with our maiden crop, April, 2020 is right around the corner, time to acquire genetics and get started all over again. Hopefully on a much larger scale.
Peter Epstein: Are you in talks with potential strategic or financial partners?
Frederick Pels: Strategic? Yes, definitely. But, we don’t need any financial partners at this time. A lot of eyes are on us, watching this crop, how well it goes for us. As a publicly traded company, we will see all the deal flow we could possibly want. The ability to quickly raise capital is extremely important in the initial years of a market boom (in hemp). We are fully funded for the foreseeable future.
Peter Epstein: Why should investors consider buying shares of Gaia Grow Corp.?
Frederick Pels: We strongly believe that now is the time to be investing in the cultivation of hemp at large commercial-scale. We are looking at opportunities all over North America, but first we need to deliver our first harvest, in about two months. Readers should know that companies can’t just buy land and start farming the next day. It takes many months to over a year to get all the permits and approvals, complete surveys and studies, etc. If you miss a growing season, you have no choice but to wait, wait for up to a year, for the next window of opportunity.
We are not waiting! We have a crop in the ground, a fairly large crop of 1,494 acres. If all goes reasonably as planned, it will comfortably fund Gaia Grow Corp. (TSX-V: GAIA) through to bigger and better crops next year. After that? The sky’s the limit. We could possibly become vertically integrated with CBD extraction equipment. We could potentially be growing hemp in multiple provinces of Canada and/or states in the U.S. {corporate website}
Peter Epstein: Fredrick, thank you so much for your time. I agree that hemp is a tremendous investment opportunity! I will be watching Gaia Grow closely for news on its maiden hemp crop. Good luck!
Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.
Disclosures: The content of this interview is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Gaia Grow, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Gaia Grows are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.
Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes hes diligent in screening out companies that, for any reasons, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts, financial calculations, etc., or for the completeness of this interview or future content. [ER] is not expected or required to subsequently follow or cover events and news, or write about any particular company. [ER] is not an expert in any company, industry sector or investment topic.
Streetwise Reports Disclosure: 1) Peter Epstein’s disclosures are listed above. 2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
The current headwinds facing the company and their expected impact are described in a BMO Capital Markets report.
In a July 29 research note, analyst Danilo Juvane reported that BMO Capital Markets downgraded its rating on Kinder Morgan Inc. (KMI:NYSE) to Market Perform due to a paucity of upcoming catalysts and the likelihood of decreased future revenue. “We see Kinder Morgan stock as having a balanced risk/reward,” added Juvane.
At the same time, BMO maintained its $22 per share target price on Kinder Morgan because the energy firm has been “one of the best year-to-date performers in the midstream sector,” Juvane highlighted. This was driven by its “significant deleveraging, an improved organic growth outlook and financial flexibility.” Kinder Morgan’s current share price is around $20.68.
In terms of catalysts on the horizon, the only possibilities are a sale of the CO2 business or a sale of Kinder Morgan Canada Ltd. “However, we don’t see either catalyst materializing,” Juvane commented. Kinder Morgan Canada has indicated it intends to keep its structure intact, and the Tall Cotton issues will likely preclude Kinder Morgan receiving an acquisition proposal at an attractive multiple.
Regarding the expectation for decreased revenues, Juvane pointed out they’re likely to come, in part, from Kinder Morgan’s carbon dioxide segment, specifically, due as a result of recent suspension of Tall Cotton capex. BMO estimated the resulting drop in EBITDA by 2023 at $300 million.
Another factor likely to negatively affect revenue is the “well-known” and “well-worn” interstate pipeline contract roll-offs, Juvane noted. “We see base contract declines and headwinds from the 501-G process as reducing EBITDA by about $200 million and $100 million, respectively, by 2023.”
To offset the expected earnings drop and grow instead, wrote Juvane, Kinder Morgan must “deploy its targeted $2.5 billion in discretionary capex.” Were the company successful in doing so, it could mean “23% EBITDA growth in the long term, which is also likely to mirror long-term growth in the payout.”
Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from BMO Capital Markets, Kinder Morgan, July 29, 2019
IMPORTANT DISCLOSURES
Analyst’s Certification I, Danilo Juvane, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Kinder Morgan, Inc. Disclosure 6C: Kinder Morgan, Inc. is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services. Disclosure 9B: BMO Capital Markets makes a market in Kinder Morgan, Inc. in United States.
For Important Disclosures on the stocks discussed in this report, please click here.
Our researchers have identified a very rare type of price pattern that is typically associated with explosive trend changes and trends. We call this type of pattern a “Sandwich” pattern because of how price reacts within a range. The IWM, Russell 2000 ETF, is illustrating a nearly perfect example of this pattern right now.
Daily IWM chart (Russell 2000 Small Cap Index)
This close up view of the Daily IWM chart highlights the Sandwich pattern over the most recent 5 trading days and how price enters this volatile period, rotates around within a range, then settles near the upper or lower end of the range before a price breakout occurs. Notice the earlier Sandwich pattern setup and how price settled near the bottom of the range before a downside price leg pushed the price much lower.
It is our belief that the IWM could be setting up for a significant reversal or breakout based on this Sandwich pattern os be ready for an extended move.
Longer-term View of the Daily IWM chart
Here is a longer-term Daily IWM chart that highlights previous Sandwich patterns for you to review. We go into more detail and a very interesting setup in the IWM and transportation index that took place in 2008, same set up we see now. See charts and report here.
One thing to understand about the Sandwich pattern is that it is an early warning sign that price has reached an inflection point and will likely attempt to break out or reverse down from the ranges set up within the Sandwich pattern.
Also, you can see from the examples, above, that these patterns can take many bars to form and are sometimes somewhat convoluted in structure. The most recent Sandwich pattern is unique because it is very defined over the past 5+ days. We believe an upside price pop to the upside could turn into a “washout high” price setup.
Compare this price activity to the SPY chart and you’ll see that the IWM, Small Caps, are operating as a leading price indicator for the potential breakout/breakdown move that may happen in the immediate future. We see similar types of price rotation, but nothing as clear as we see on the IWM chart.
The fed news is shaking things up and our analysis stats this month could be the market top. We expect Aug 19th-ish… but this month is the window we feel it may happen. Stay tuned to our research – this is going to be fun to trade.
WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500
In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here.
I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.
On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.
More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.
CONCLUDING THOUGHTS:
In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.
Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our Wealth Building & Global Financial Reset Newsletter. You won’t want to miss this big move, folks. As you can see from our research, everything has been setting up for this move for many months.
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Enphase Energy’s shares are surging by more than 30% today after releasing strong growth and earnings for Q2/19.
Global solar energy technology firm and major supplier of solar microinverters Enphase Energy Inc. (ENPH:NASDAQ)announced financial results for the second quarter of 2019 yesterday after markets closed.
The company reported revenue of $134.1 million for Q2/19, an increase of 34% sequentially and 77% year-over year. The firm indicated that its Enphase IQ 7 products shipments equaled 98% of all microinverters sold. Enphase added that it shipped approximately 416 megawatts DC, or 1,283,680 microinverters, and advised that it continues to see strong demand across the board from customers.
The company further reported Q2/19 GAAP operating income of $17.4 million (non-GAAP $23.2 million) and GAAP net income of $10.6 million (non-GAAP $23.2 million) resulting in GAAP diluted EPS of $0.08 (non-GAAP $0.18).
President and CEO Badri Kothandaraman commented, “While demand continued to outstrip available supply, we were able to increase capacity to better support our customers and we are on track to have a supply of approximately 2,000,000 microinverters in Q2/19.”
The company reiterated some of the business highlights in the quarter, noting that in June it announced that more than 500 solar installation companies in the U.S. have benefitted from significantly reduced solar design complexity and logistics by adopting Enphase Energized AC Modules. Also in June, Enphase announced that it renewed its low-income solar partnership with GRID Alternatives, a national leader in making renewable energy technology and job training accessible to underserved communities. And in July, Enphase announced the first shipment of seventh-generation Enphase IQ microinverters produced in Mexico as part of its expanded manufacturing agreement with Flex.
The company also provided some estimates for Q3/19: “Revenue to be within a range of $170180 million, including a range of $610 million for ITC safe harbor; GAAP and non-GAAP gross margin to be within a range of 3336%; and GAAP operating expenses to be within a range of $28.530.5 million, including a total of approximately $5.0 million estimated for stock-based compensation expenses and acquisition related expenses and amortization.”
Enphase Energy is headquartered in Fremont, Calif. and describes its business as being a global energy technology company that delivers smart, easy-to-use solutions that connect solar generation, storage and management on one intelligent platform. The company states that it has revolutionized the solar industry with its microinverter technology, producing a fully integrated solar plus storage solution. To date, the firm has shipped more than 21 million microinverters and deployed over 940,000 Enphase systems in 130 countries.
Enphase shares are up sharply higher today on the news opening at $26.31 (+$4.66, +21.52%) over yesterday afternoon’s close of $21.65, and so far today have traded between $26.29 and $28.93, a 52-week intraday high price. At present, the stock is trading at $28.19 (+$6.54, +30.21%).
Disclosure: 1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
The argument against another Fed interest rate cut was slightly boosted on Friday afternoon after the United States added a solid 164,000 jobs to its economy last month.
With unemployment near a 50-year low at 3.7% and average earnings edging up to 3.2% from 3.1% year-on-year, the US economy remains a better position in comparison to everyone else. However, job gains for the two previous months were revised downwards by a total of 41,000.
Today’s jobs report is unlikely to impact the Federal Reserve’s monetary policy path and this sentiment was reflected in the Dollar’s muted reaction. While economic data from the United States will influence rate cut speculation, the driving factor behind future monetary easing will revolve around US-China trade developments.
Taking a look at the technical picture, the Dollar Index is hovering around 98.30 as of writing. A weekly close below 98.00 could trigger a move back towards 97.50 in the week ahead.
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.
The yellow metal was initially suffering a disappointing session this week. Gold racked up a second consecutive losing week as a resurgent US dollar held the price down.
The USD rally in response to the FOMC was two-fold. Firstly, the .25% rate cut was priced into the market weeks ago. Had the Fed cut rates by the larger .50%, then we would have likely seen a move lower. However, in order for the lower cut to have halted the rise in USD, the market was looking to forward guidance.
Unfortunately, USD bulls were left disappointed here as the fed unexpectedly downplayed the likelihood of future easing. The Fed said that this cut was not being viewed as the start of a lengthy easing cycle. Instead, it was merely a “mid-cycle adjustment”.
In light of recent strength in US data ahead of the meeting, the Fed’s message isn’t shocking. But, it is certainly disappointing for those who were expecting more doom and gloom, in line with recent Fed commentary.
The market is still pricing in one further rate cut over the remainder of the year. However, if incoming data continues to surprise to the upside, we are likely to see this price coming off, supporting USD further. Needless to say, this will be highly bearish for gold.
It is worth noting that gold is still underpinned by safe-haven inflows. This is given the downside move in equities as well as ongoing tension in the Middle East which continue to pose a broader risk. The recent seizure of a British oil tanker by Iran has seen the US formally calling on Germany to join it, along with France and the UK, in securing the strait of Hormuz. Given the recent hostility from Iran, such a move poses the risk for full military action between the US and Iran.
However, gold was able to recover late in the week. Risk sentiment soured in reaction to news that Trump has announced a fresh batch of tariffs on $300 billion of Chinese goods. These are due to take effect September 1st. This highlights Trump’s frustrations with the latest round of trade talks. The announcement has further taken the market by surprise.
Technical Perspective
For now, gold remains capped by the rejection from the completion of the large ABCD symmetry pattern into 1449.75. This took price back down beneath the August 2013 highs of 1433.48. However, for now, the move lower has been met by buyers at lows. Above the 1391.61 level, focus is on a further move higher.
Silver
Silver prices tracked the moves in gold this week, cascading lower over the session as USD surged higher. Furthermore, the fall in equities has also weighed on silver due to its frequent industrial usage.
Traders have also been keeping an eye on the US-China trade talks this week. Talks ended without any signs of progress and saw Trump announcing fresh tariffs. While a further round of discussions are due to take place in September, the market is now fearful that China will pull out of the talks. Doing so would lead to a further escalation of the trade war.
Technical Perspective
Silver prices have posted a strong reversal from the completion of the ABCD symmetry pattern into the 78.6% retracement mid-2018 highs at 16.5877. Price is now posting a weekly bearish engulfing candle, closing back beneath the 16.1994 level. This suggests the risk of a further reversal over the coming weeks.
USDA forecasts increased Canadian oats exports to the United States. Will the oats prices continue declining?
The US Department of Agriculture forecast 20 percent expansion in global oats trade by 2019/20, due almost entirely an increase in Canadian exports to the United States. Canada now supplies 95 percent of total oats imports for the United States, according to Grain: World Markets and Trade report of USDA. As a result of uncertainty in rapeseed trade with China, some growers have shifted away from rapeseed to grow more barley and oats. And a jump in Canadian oats production and subsequent expansion in exports will go to US market in the south. Higher supply estimates are bearish for oats.
On the daily timeframe the OATS: D1 is below the 200-day moving average MA(200) which is declining .
The Parabolic indicator gives a sell signal.
The Donchian channel indicates no trend yet: it is flat.
The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 257.4. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upped Donchian boundary at 273.1. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (273.1) without reaching the order (257.4), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
EURUSD has returned to 1.1080; right now, it is consolidating around this level. Possibly, the pair may form a new descending impulse to reach 1.1066 and then start a new growth with the target at 1.1081 or even 1.1100. Later, the market may continue trading downwards with the target at 1.1000.
GBPUSD, “Great Britain Pound vs US Dollar”
GBPUSD is still consolidating around 1.2110. Today, the pair may form a new descending structure towards 1.2070 and then start another growth to return to 1.2110. After that, the instrument may continue trading inside the downtrend with the short-term target at 1.2044.
USDCHF, “US Dollar vs Swiss Franc”
USDCHF is forming the first ascending impulse with the target at 0.9900.After that, the instrument may start another decline towards 0.9888 and then form one more ascending structure with the first target at 0.9934.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY is forming another descending wave with the target at 106.11; it has formed a downside continuation pattern at 107.38. Today, the pair may test 107.20 from below and then fall to reach the above-mentioned target. Later, the market may start a new correction to reach 108.00.
AUDUSD, “Australian Dollar vs US Dollar”
After breaking 0.6830, AUDUSD has expanded its consolidation to the downside. Possibly, today the pair may return to 0.6830 to test it from below and then continue trading downwards with the target at 0.6755.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB has reached the first correctional target at 64.00. Today, the pair may form a new descending structure with the first target at 63.22.
XAUUSD, “Gold vs US Dollar”
After completing another ascending structure at 1440.14 and forming another consolidation range around this level, Gold has broken it to the downside; right now, it is forming the second descending impulse with the target at 1427.05. After that, the instrument may start a new growth towards 1434600 and then form one more ascending structure to with the first target at 1423.23.
BRENT
After finishing the descending wave at 60.21, Brent has formed a new rising impulse towards 62.40; right now, it is being corrected with the target at 61.25. Later, the market may start another growth with the short-term target at 63.63.
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.
