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WEEK AHEAD: AUGUST 17

وصف مختصر

The price of gold went from record highs above $2000 per oz to its biggest one day price crash in seven years. Is it the end of the bull market? I discuss that and preview the major economic events of the week. Thanks! Rich

نص الفيديو

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Hi everyone,

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It’s time to preview the
week ahead in markets

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and I have been getting so many messages
and comments with this one question

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that this video couldn’t
be about anything else.

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Is it all over for gold?

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Gold saw its biggest one day
price drop in seven years last week

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and understandably traders are wondering
if it means the bull market is over.

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I’ll give my opinion on that
AND rundown highlights

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from the economic
calendar in just a moment.

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Since we’re talking about gold

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Did you know it is the
most malleable element?

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A single ounce of gold can be beaten
into a THREE HUNDRED-square-foot sheet.

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And a sheet of gold can be made
so thin that it becomes transparent.

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Gold is also extremely ductile.

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A single ounce of gold
can be stretched into a gold

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thread 5 miles
(that’s 8 kilometres) long.

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If you liked learning something on gold

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please click the like button it really
helps us spread the word about these videos!

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So we’re getting into the typical
late August thinner economic calendar

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but there are still some
things to keep our eye on.

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Japan’s Q2 GDP is
expected to show the world’s

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third largest economy
remains in a recession.

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There is inflation data
from the UK and Germany.

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FOMC minutes is the big one mid-week
and ECB minutes are released the day after.

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Then we have August PMIs and
UK retail sales to round off the week.

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So what ON EARTH happened that
made gold drop 125 dollars in one day?

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And I haven’t even mentioned silver
which fell almost FIFTEEN PERCENT!

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I would say there were four main causes.

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One is the price trend was turning
parabolic and wasn’t sustainable

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gold had risen 14 out of
15 days and gained 15%.

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Two is profit-taking above
$2000 per oz and at record highs.

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Three is that the US
dollar was recovering

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after the better-than
expected US jobs report.

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Four is that the US
government was selling large

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amounts of debt at auction
so investors sold their bonds

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before the new supply came in.

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Bond prices dropped amid the selling,

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bond yields spiked and
the price of gold tanked.

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The first question I’m asking myself is

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are those factors that drove the
gold price down going to continue?

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Well the overbought market
is over thanks to the sell-off

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and Treasury bond
auctions are finished for now

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The US dollar is seeing some
recovery off two-year lows

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and could be establishing a bottom
but for now remain in a downtrend.

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So the answer is probably no.

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It really all boils down to real yields

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that’s bond yields which
take into account inflation.

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Right now when you buy a
10 year US government bond,

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you will lose money after
accounting for inflation.

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The reason that’s happening is
that the Federal Reserve is keeping

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yields artificially low by buying
government and corporate bonds.

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At the same time the
government is spending lots

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of money to help the
economy in the pandemic,

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which investors expect to cause inflation.

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While real yields remain negative
it’s still a good environment for gold.

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Short term I think there is going
to be some push and pull between

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traders who expect a bigger a
pullback after Tuesday’s big drop

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and those who missed the rally
and are jumping in again near $2000.

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After such a strong rally,

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it would make sense if price consolidate
a bit before making the next move.

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Right thanks everyone,

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good luck trading and
make sure to subscribe to

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our channel so you
don’t miss the next video.

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Thanks for watching!

 

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