An 11% annual gain for any asset doesn’t seem terribly shabby.
That pretty much sums up where gold is as 2017 winds down, but there seems little excitement around the metal. Maybe that’s not too surprising as the investor love affair with equities goes on and on, and the S&P 500 looks at roughly a 15% gain for the year so far.
Gold is the place investors head to when the political and economic going gets rough, but it seems not much jolts investors these days. Washington and worries about the tax plan gave the metal a nice bump last week, but those gains dissipated when scares over instability in Germany were quickly shoved back in the drawer.
We had a bullish call on gold recently, so it’s only fitting that we toss a bearish one into the mix. Here’s our call of the day from Tiho Brkan, founder of The Atlas Investor blog, who says gold and silver have some way to go on the downside.
As Brkan explains in a series of tweets, there are a bunch of hedge funds holding about 200,000 long (bullish) positions on gold and a drop below $1,260 an ounce may push them out of the trade.
(1/2) Precious Metals selling pressure.
Hedge funds and other speculators hold around 200,000 net long contracts in Gold.
A break below 1,260 would signal a shake out, where bulls cut their bets in a hurry as prices trend downwards. pic.twitter.com/VEDw1IkNR1
— Tiho Brkan (@TihoBrkan) November 21, 2017
According to the portfolio wealth manager, gold and silver are “under pressure” and “in a technical bearish reversal. I would be expecting further downside from here until the majority of the hedge fund net longs are shaken out,” he says.
Gold GCZ7, +0.16% is currently trading at $1,278.20, so not that far off that trigger.
(2/2) Precious Metals selling pressure.
Hedge funds and other speculators hold around 70,000 net long contracts in Silver and have been adding in recent weeks.
A break below 16.60 would also see bulls cut their bets rather quickly. Keep a close eye on the PM sector now. pic.twitter.com/cdMh3lRayP
— Tiho Brkan (@TihoBrkan) November 21, 2017
Taking a different tack, UBS strategist Joni Teves is decidedly more upbeat. She says gold’s resilience this year has been due to the fact that “known unknowns and unknown unknowns continue to lurk.”
“We think gold’s performance of late and the prospect for further seasonal demand to kick in – albeit with unexceptional volumes — should put gold in a reasonably healthy position for a rebound above $1,300 toward the year-end through to early 2018,” says Teves.
Key market gauges
There’s a little life in these markets yet, with the Dow YMZ7, +0.35% and the S&P ESZ7, +0.27% pointing higher and Nasdaq futures NQZ7, +0.36% hinting at a record session for techs. Europe SXXP, +0.48% is choppy, but eyeing a second straight win. In Asia ADOW, +0.59% , the hot tech sector continues to drive gains.
See the Market Snapshot column for more.
Apart from two big jumps, cryptocurrency ether has largely been moving down or sideways this year. But that could be about to change, looking at the hints in the chart below.
Compliments of a trader identified as theEquilibrium on StockTwits, the chart suggests that ether is ready to break out to new highs:
— StockTwits (@StockTwits) November 20, 2017
Bitcoin BTCUSD, -0.19% has hogged the spotlight this year, with an eye-popping 700%-plus bust higher that could be the talk of Thanksgiving-dinner discussions this year. It’s closing in on $8,200 this morning.
Bitcoin’s market cap just passed McDonald’s.
— Charlie Bilello (@charliebilello) November 20, 2017
Some might be tempted to describe ether, which is build on the ethereum blockchain, as bitcoin’s awkward cousin. But note that it is up a whopping 4,000%-plus year-to-date. It started the year at around $8 and is currently changing hands at $361.
On Sunday, ether hit a high last reached on Sept. 2, driven partially by a Bloomberg report that it could get its own derivatives market, explained CoinDesk.
According to that report, derivatives on ether would help bring in professional traders and investors who have been wary of dipping a toe in such unregulated markets.
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Thank Apple AAPL, -0.10% and big tech. The total 2017 corporate cashpile is set to reach $1.9 trillion by end 2017, says Moody’s.
Basketball dad doubles down on not thanking Trump
As part of a last flurry of earnings, Lowe’s LOW, +0.20% , Dollar Tree DLTR, +2.64% and Campbell Soup CPB, +0.42% are on the docket early. HP HPQ, +1.70% Hewlett-Packard Enterprises HPE, +3.00% and Salesforce.com CRM, -0.20% (see preview) are due after the close.
Existing home sales this morning may get some attention. This evening, Federal Reserve Chairwoman Janet Yellen is due to speak, a day after revealing she’ll leave the central bank once Powell starts as chief.
$530 billion — That’s roughly the current market cap of Chinese messaging and gaming group Tencent 0700, +2.38% , whose shares have more than doubled this year.
“I thank all warriors of Islam, our diplomats, the government and the nation, as well as the Supreme Leader of the Islamic Revolution, armed forces and the Iraqi and Syrian nation for their efforts to put an end to a group that did not bring anything for us but evil, misery, destruction, murder and savagery.” — That was Iranian President Hassan Rouhani declaring an end to Islamic State terrorist group, which he noted was “fed and armed by major world powers.”
He made the statement at the Fifth National Congress of the House of Farmers in Tehran.
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