Sample Category Title

Gold has been developing within a symmetrical triangle over the past two years as it failed to post a higher top from 1375 on June 2016. The price failed to extend its gains above the aforementioned level and has been creating a continuation pattern, indicating a breakdown as the previous tendency was a descending move. In case of a drop below the 1204 strong support obstacle, could open the way for the 1123 level.

However, if the price continues to move slightly to the upside, it could test the upper boundary of the symmetrical triangle, near 1340, which is close to the 100-month simple moving average. During the previous couple of weeks, the precious metal rebounded on the 1235 support barrier, which overlaps with the 200-week SMA as well as with the 50-month SMA and posted two consecutive bullish weekly sessions.

In the long-term timeframe (weekly chart), the metal is currently trading above the mid-level of the Bollinger band, which is acting as a short-term support obstacle. Moreover, the Relative Strength Index (RSI) is pointing up and it just climbed into the positive zone.

Having a brief look in the short to medium-term timeframe, the yellow metal touched a one-month high at 1296 and is moving towards the 1300 significant psychological level.

Gold rose to a new one-month high after extending a rally that started from the 1240 area on December 12. The bullish bias is strong in the short term but in the bigger picture, the precious metal remains in a range, essentially between key psychological levels of 1200 and 1300.

Risk is clearly tilted to the upside in the near term and the next target is 1300, which is seen to be a strong resistance level. It would likely be quite a challenge to break it. A failure to push higher from this barrier would see the market stuck in the broader consolidation range. Upside momentum may be fading since the stochastic and RSI are in or near overbought territory.

Any dip in price is expected to find support at 1270, which is where the 200-day moving average is located. Further support is seen at 1240 and a drop below this would open the way for a decline towards the July low of 1204.79.

Overall, bullish sentiment is expected to remain intact in the short term based on the bullish trend and momentum indicators. However, only a sustained break and move above 1300 would strengthen the bullish bias for a re-test of September’s peak of 1357.47. From here, gold could be on the path towards 1380.

Headlines/Economic Data

General Themes: Asian currencies continue to gain

Major Asian equity markets end 2017 higher: Hang Seng YTD return +36.2%, Kospi +21.8%, Nikkei 225 +19.2%, Taiex +14.8%, ASX 200 +7.1%, Shanghai Composite +6.3%

South Korea 2017 inflation below 2% target

Upcoming Euro Zone data in focus

Australia/New Zealand

ASX 200 opened flat; closed -0.4%

ASX 200 REIT Index -0.7%, Consumer Discretionary -0.6%, Financials -0.3%

(AU) AUSTRALIA NOV PRIVATE SECTOR CREDIT M/M: 0.5% V 0.4%E; Y/Y: 5.4% V 5.2%E

Milk Producer Fonterra cuts New Zealand milk collections forecast on dry weather conditions

China/Hong Kong

Shanghai Composite opened flat, Hang Seng +0.2%

Hang Seng Services Index +0.9% (airlines and gaming shares gain), Industrial Goods +0.6%; Information Technology -0.4%

(CN) PBoC: To set up temporary liquidity facility for the China Lunar New Year, which will allow banks to use official required deposit reserves of up to 200bps

(CN) China MOF researcher said to suggest a property tax trial in Xiongan - financial press

(CN) China Finance Ministry (MOF) says to continue to cut tax and fees in 2018; To focus on local govt debt risk prevention in 2018 - Xinhua

(CN) China End-Nov Outstanding Local Government Debt: CNY16.6T – MOF

(CN) PBoC: Skips OMO for 6th straight session; Weekly net drain CNY290B v CNY200B injection w/w; For 2017, the PBoC drained CNY65B

(CN) PBoC sets yuan reference rate at 6.5342 v 6.5412 prior

Smartphone maker Huawei sees slower revenue growth in 2017 vs 2016: Guides FY17 Rev CNY600B v CNY522B y/y, +14.9% y/y; sees smartphone shipments 153M units, +10.1% y/y (Note: In FY16 Smartphone shipments were +29% y/y and total Rev growth was 32%)

(CN) China Copper treatment and refining charges (TC/RCS) for Q1 2018 said to have been set by smelter group at $87/ton vs $95 q/q - financial press

Japan

Nikkei 225 opened +0.2%; closed: -0.1%

TOPIX Securities Index +0.6%

Asahi Glass +2% (Speculation that FY op profit may exceed expectations)

Mitsubishi UFJ +1.2%

Retailer Adastria -8% (9-month profits declined 41%)

Japan Foreign Minister said to visit China in Jan – Japanese Press

Looking ahead: Japanese markets are closed for holiday from Jan 1-3rd

Korea

Kospi was closed in observance of holiday

Nov inflation remained below the Bank of Korea’s 2% target: SOUTH KOREA DEC CPI M/M: 0.3% V 0.3%E; Y/Y: 1.5% V 1.4%E; CPI Core Y/Y: 1.5% v 1.5%e; 2017 Avg CPI: 1.9% v 1.0% in 2016

South Korea Industry Minister Paik: Reiterates expects 2018 exports to rise amid global recovery

South Korea Foreign Ministry: Seized a vessel with a Hong Kong flag in relation to oil sales to North Korea

Other Asia

(SG) Singapore Nov Bank Loans and Advances Y/Y: 7.1% v 6.8% prior

(SG) Singapore Nov Money Supply M1: 7.3% v 8.8% prior; M2 Y/Y: 3.2% v 4.6% prior

(TW) Taiwan Dollar (TWD) +0.5%, continues to trade at 4-year high

(TW) Taiwan Central Bank said to ask banks to purchase US dollars amid gains in the TWD

North America

US equity markets closed higher: Dow +0.3% (record close), S&P500 +0.2%, Nasdaq +0.2%, Russell 2000 +0.3%

S&P500 Real Estate Sector +0.6%, Utilities +0.6%

(US) US based stock funds see $24.1B inflow in week ended Dec 27th (largest since Dec 2014) – Lipper

Networking equipment firm Adtran [ADTN] cut Q4 outlook: Guided Q4 ~$0.01 v $0.15e, Rev ~$125M v $162Me (guided $155-165M prior); cites factors

including slowdown in spending at domestic Tier 1 customer

(US) TREASURY $28B 7-YEAR NOTE AUCTION RESULTS: DRAWS 2.370%; BID-TO-COVER: 2.55 V 2.36 PRIOR AND 2.52 AVG OVER LAST 12 AUCTIONS (highest BTC since Sept)

(US) US President Trump: Been ‘soft’ on trade with China - NYT

(US) DOE CRUDE: -4.6M V -3.5ME

During Asian session, WTI Crude Oil Futures trade above $60/bbl, highest since June 2015 amid US weekly inventories data

Europe

(IT) Italian Pres signs decree to dissolve parliament ahead of elections (as expected); Italy officials confirm general election will be held March 4th

Looking Ahead: Early close for the UK; Dec Preliminary CPI data due to be released for Germany and Spain, along with Euro Zone Nov M3 Money Supply and Private Sector Loans.

Levels as of 01:00ET

Hang Seng +0.3%; Shanghai Composite +0.2%; Kospi closed

Equity Futures: S&P500 +0.1%; Nasdaq100 flat, Dax +0.1%; FTSE100 +0.1%%

EUR 1.1936-1.1949; JPY 112.69-112.97; AUD 0.7790-0.7804 ;NZD 0.7084-0.7103

Feb Gold flat at $1,297/oz; Feb Crude Oil +0.7%% at $60.27/brl; Mar Copper +0.1% at $3.309/lb

Nasdaq Short Term Elliott Wave view suggests that the Index remains bullish as far as pullbacks stay above Intermediate wave (4) at 6232.3. Rally from Intermediate wave (4) low unfolded as a double three Elliott Wave structure where Minor wave W ended at 6545.75 and Minor wave X is proposed complete at 6432.25 in the green box. Internal of Minor wave W unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6427.75, Minute wave ((x)) ended at 6383, and Minute wave ((y)) of W ended at 6545.75.

Internal of Minor wave X unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6463.25, Minute wave ((x)) ended at 6520.75, and Minute wave ((y)) of X ended at 6432.25. Near term, while dips stay above 6432.25, but more importantly as far as pivot at 12/5 low (6232.3) stays intact, expect Index to extend higher. Unless already long with a risk free trade from the green box area, we prefer to wait for the Index to break above Minor wave W at 6545.75 before buying the dips again. Until the Index breaks above Minor wave W at 6545.75, a double correction in Minor wave X still can’t be ruled out.

If the Index breaks below 12/26 low (6432.3) from here, then it could either form a triple three or double three correction from 12/19 peak. In the case of a triple three correction, Index should then extend lower to 6371 – 6391 area to end Minor wave X before the rally resumes. In the case of a double three correction, then Index can go to as low as 6234 – 6361 to end Minor wave X before buyers appear for at least a 3 waves bounce.

Nasdaq 1 Hour Elliott Wave Chart

For the 24 hours to 23:00 GMT, the AUD rose 0.33% against the USD and closed at 0.7795, lifted by a surge in the prices of key commodities.

LME Copper prices rose 1.1% or $76.0/MT to $7216.0/MT. Aluminium prices rose 2.1% or $46.5/MT to $2246.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7795, with the AUD trading flat against the USD from yesterday's close.

Overnight data revealed that Australia's private sector credit climbed 0.5% MoM in November, more than market consensus for a gain of 0.4%. In the prior month, the private sector credit had risen 0.4%.

The pair is expected to find support at 0.7779, and a fall through could take it to the next support level of 0.7764. The pair is expected to find its first resistance at 0.7810, and a rise through could take it to the next resistance level of 0.7826.

Next week, all eyes would be on the release of Australia's AiG performance of manufacturing as well as services indices along with the nation's trade balance figures.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the EUR rose 0.33% against the USD and closed at 1.1940.

Yesterday, the European Central Bank (ECB), in its economic bulletin report, stated that the Euro-bloc's economic expansion continues to be solid and broad-based and the region is expected to sustain its nascent growth into next year. Further, the central bank expects underlying inflation in the single currency region to pick up gradually and reiterated that the solid recovery still requires monetary policy stimulus to bring inflation to the target in a sustainable way.

The US Dollar fell against a basket of major currencies, following a pair of downbeat economic reports in the US.

Data revealed that advance goods trade deficit unexpectedly widened to $69.7 billion in November, hitting its highest level since March 2015, reigniting worries that trade could act as a drag on the nation's fourth-quarter growth. The advance goods trade deficit had recorded a revised level of $68.1 billion in the prior month, while markets were anticipating it to narrow to $67.9 billion. Moreover, the number of Americans filing for fresh jobless claims surprisingly remained steady at a level of 245.0K in the week ended 23 December, defying market expectations for a fall to a level of 240.0K.

Other data revealed that the US Chicago Fed purchasing managers index (PMI) surprised with an unexpected rise to a level of 67.6 in December, confounding market consensus for a fall to a level of 62.0. The index had recorded a reading of 63.9 in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.1943, with the EUR trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.1914, and a fall through could take it to the next support level of 1.1886. The pair is expected to find its first resistance at 1.1965, and a rise through could take it to the next resistance level of 1.1988.

Trading trend in the Euro today is expected to be determined by the release of Germany's flash consumer price index (CPI) for December, slated to release in a few hours.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP rose 0.2% against the USD and closed at 1.3434.

On the data front, UK's BBA mortgage approvals unexpectedly dropped to a level of 39.5K in November, dropping to its lowest level in over a year, suggesting that the nation's housing market is losing steam. Markets had expected mortgage approvals to rise to a level of 41.5K, after registering a revised level of 40.4K in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.3456, with the GBP trading 0.16% higher against the USD from yesterday's close.

The pair is expected to find support at 1.3428, and a fall through could take it to the next support level of 1.3401. The pair is expected to find its first resistance at 1.3471, and a rise through could take it to the next resistance level of 1.3487.

Going ahead, investors would look forward to Britain's Markit manufacturing, services and construction PMIs, scheduled to release next week, to gauge the nation's economic strength.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.32% against the JPY and closed at 112.88.

In the Asian session, at GMT0400, the pair is trading at 112.77, with the USD trading 0.1% lower against the JPY from yesterday's close.

The pair is expected to find support at 112.56, and a fall through could take it to the next support level of 112.36. The pair is expected to find its first resistance at 113.08, and a rise through could take it to the next resistance level of 113.40.

Looking forward, Japan's Nikkei manufacturing as well as services PMIs data, due to release next week, will attract significant amount of investor attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.71% against the CHF and closed at 0.9788.

In the Asian session, at GMT0400, the pair is trading at 0.9787, with the USD trading a tad lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9755, and a fall through could take it to the next support level of 0.9724. The pair is expected to find its first resistance at 0.9835, and a rise through could take it to the next resistance level of 0.9884.

Moving ahead, traders would focus on Switzerland’s SVME–PMI and real retail sales data, both set to release next week.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD declined 0.75% against the CAD and closed at 1.2565.

In the Asian session, at GMT0400, the pair is trading at 1.2563, with the USD trading marginally lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2534, and a fall through could take it to the next support level of 1.2505. The pair is expected to find its first resistance at 1.2615, and a rise through could take it to the next resistance level of 1.2667.

Moving ahead, market participants would closely monitor Canada's RBC manufacturing PMI and unemployment rate data, both slated to release next week.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.