Daily Alert – Friday 7th August 2020: GOLD is trade of the week, again
Risk sentiment was indecisive on Monday and Tuesday, moderately risk-on on Wednesday and Thursday and now back to indecisive today (as of 1700 BST). The media still obsessively report Covid-19 case numbers, but if we look at the COVID Tracking Project’s numbers we see the infection rate is unchanged (positive tests/tests as a percentage) which is good. The number of deaths seems to have peaked and is on the way down (as I predicted, based on the hospitalisation numbers having peaked a few weeks ago). This analysis is not rocket surgery but would appear to be beyond the media. Poor lambs. So, it’s going the right way in the US and this gives cause for hope because they really have made a total shambles of it so far.
Yesterday the Bank of England kept the interest rate and QE unchanged as expected. GDP is forecast to be -9.5% for this year (horrible) and +9.0% for 2021.
US equity indices have been grinding up all week. WTI is glued to resistance where it has been for around 10 weeks. GOLD had another stellar week despite some profit taking today after the good US data (non-farm payroll, average hourly earnings and unemployment rate all beating expectations). I went long on GOLD on Tuesday and closed the trade an hour or so ago for around a gain of +6.7% on my capital on a risk of 1% of my capital. I have not managed to make a video on this trade yet so it will be published on Monday.
On the weekly charts, currencies show very little movement. However, this is due to todays’ reversals in USD, JPY, EUR and the commodity currencies at 1330 this afternoon when the good US data came out. It would have been difficult to make our target of two times risk this week on currencies even before the reversal, but no money should have been lost.
That is it from me. I will send a separate email with your Performance Report for July and YTD.
Have a great weekend and I will be back on Monday with your Trading Plan for week 33.
VIP Club members can get the final powerpoint HERE under the “Videos” tab.