In this report, I cover the early market action from London on Monday, July 1st, 2019. I look briefly at the precious metals, the stock market, the dollar, the bond market and the price of WTI and Brent crude oil.
Today I look at the price in gold overnight and note that even though gold has broken out of key technical resistance levels in the last few weeks that some kind of pullback like we are seeing today is normal in the scheme of things. I note, nevertheless, that the price actions have all the hallmarks of a Bullion Bank attack or unloading of paper gold contracts on Comex.
I also note that that the rally in stocks and the strengthening in the dollar overnight could very well be a temporary knee jerk reaction to the G20 Communique from Osaka, Japan. Even though the G20 statement gives hope for solving trade tensions between the U.S.A. and China I note that a Trade Agreement was supposed to have been reached earlier this year on March 1st.
My conclusion is that Trade tensions and a world economic slowdown are still very much a reality and that for those who are precious metals stackers this sharp takedown in the gold price is actually an opportunity and not a setback.
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One thing i do not think you are accounting for in your outlook is Iran. What will happen when the EU does not give better terms prior to Iran breaking the agreement by increasing their uranium enrichment levels? After it is apparent the EU will not concede anymore in negotiations and Iran has broken the deal will Iran start publicly negotiating with the USA? What will happen to the Oil Sanctions as a deal is negotiated and progressed with the USA? What would 3MMbbl/d oil hitting the market do to the price of oil? If you think Iran is not already in the works answer this. Did Kim Jung-un look anxious or nervous when he met Trump at the DMZ or in Hanoi?
As Trump said "Lower oil prices are tax cuts for the WORLD".
What does lower energy costs do for stocks, bonds, and inflation?
Yes, Oil will rise after OPEC+ announces production cuts this month in Geneva.
All else considered I appreciate your insight into markets and your outlook.Thank you for sharing!
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