News trading discussion - continuation

hey man, older trader here. totally forgot my account and just started a new one.

(1) Get your basic technicalities of the platform right.
This means
(i) fiddling with it alot until you're really familiar,
(ii) testing it on paper (the official acronym is "UAT", User Admin Testing), before
(iii) going live.

You need to look into bet-sizing.....

(2) News creates asymmetry (or big whips), so I suppose there is some edge to it.
Back during the institutional days, you either (1) had a position you were "wearing" into the news or (2) you stayed out.

my 2 micro-pips:
Never got the hang of news trading, (which is why I'm here to explore).
The P&L that made budget were usually the swings which we piled on to.

sorry mate, that post wasn't for you.

it was for @dragon2590

16/07
12:30 СAD CPI MoM
22:45 NZD CPI QoQ

18/07
01:30 AUD Employment Change

24/07
14:45 CAD Overnight Rate

25/07
12:30 USD GDP QoQ

BD time 19:45 news trade result is CAD/JPY pair will go up

31/07
01:30 AUD CPI QoQ
12:15 USD ADP Non-Farm Employment Change
19:00 USD FOMS

01/08
12:00 GBP Official Bank Rate

02/08
12:30 USD NonFarm Payrolls

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Gold Market Analysis Report
Date: August 2, 2024


This report comprehensively analyzes the gold market, a pivotal indicator of global economic stability and investor sentiment. As of August 2, 2024, the gold market is of utmost importance, and this report provides a detailed examination of its current state, key influencing factors, recent trends, and future outlook. The study is based on reliable data sources such as Bloomberg, The Wall Street Journal, and Trading Economics, as well as insights from the IMF, Reuters, BEA, and Forex Factory.


Current Gold Prices & Key Levels from TradingView Chart
[IMG]file:///C:/Users/wseeha/AppData/Local/Temp/msohtmlclip1/01/clip_image002.png[/IMG]

Current Price: $2,452.55 - $2,452.99 per ounce

 

1. Spot Price: $2,458.67 per ounce (as of Friday)
2. Previous Price: $2,445.77 per ounce
3. Highest Price: $2,483.68 per ounce
4. Lowest Price: $34.83 per ounce (since 1968)

Key Resistance Levels:

1. $2,427
2. $2,388

Key Support Level:

1. $2,359.50

Recent Trends and Influences

1. Economic Indicators:

Inflation Rates: The United States and the European Union, among other major economies, are experiencing persistent inflationary pressures. As a result, investors are turning to gold as a hedge against potential currency devaluation. The International Monetary Fund (IMF) has acknowledged these ongoing inflation concerns in its most recent economic outlook.

Interest Rates: Recent reports of sluggish U.S. economic performance have heightened the anticipation of potential Federal Reserve interest rate cuts. The combination of subdued manufacturing activity and an increase in jobless claims suggests a less robust economy, potentially paving the way for reduced interest rates. According to a report from Reuters, the anticipated rate cuts by the Federal Reserve are expected to contribute to an upsurge in gold prices.

Manufacturing and Employment: In July 2024, U.S. manufacturing activity experienced a greater-than-expected contraction, leading to employment levels not observed since 2020. The number of jobless claims surged to 249K, reaching the highest point in almost a year. These concerning trends were underscored in the most recent reports by the Bureau of Economic Analysis (BEA).


2. Geopolitical Tensions:

The increasing potential for a broader conflict in the Middle East makes gold more attractive as a safe-haven asset. Investors are keeping a close eye on Iran's reaction to the killing of Hamas leader Ismail Haniyeh and Hezbollah's top commander in Beirut. Political unrest usually results in higher gold prices as investors seek stability.


3. Currency Fluctuations:

The value of the U.S. dollar has been changing, and this has had the opposite effect on the Price of gold. When the dollar is weaker, gold becomes more affordable for people holding other currencies, increasing demand for gold.


4. Market Sentiment:

Caution Prevails In recent times, investors have exercised caution due to uncertain market conditions. This has led to increased volatility in stock markets and a growing appeal for gold as a reliable and stable investment.

Supply and Demand Dynamics

1. Mining Production:

Global gold production has seen modest increases, but new mining projects are limited due to environmental and regulatory challenges. Major producers include China, Russia, and Australia.


2. Central Bank Reserves:

Central banks have continued to be net purchasers of gold. Countries like China and India have increased their gold reserves, supporting global demand.


3. Consumer Demand:

Jewelry demand remains strong, particularly in India and China. However, economic slowdowns in these regions could impact future consumption. The wedding season in India, which typically drives gold purchases, is expected to boost demand in the coming months.






4. Technological and Industrial Use:

Gold's industrial demand remains stable, particularly in technology sectors like electronics and medical devices. Renewable energy and electronics innovations continue to rely on gold for its conductive properties.


Upcoming US Non-Farm Payroll Data: A Pivotal Moment
July Jobs Report: Analyzing the Numbers and Expectations

In July, there were indications of a slowdown in the U.S. labor market, which was influenced by a gradual economic deceleration and the effects of Hurricane Beryl. The upcoming nonfarm payrolls report from the Labor Department carries significant weight as it is anticipated to reveal a slight decrease in job growth. Forecasts suggest there will be 185,000 new jobs, a decrease from the 206,000 reported in June. The unemployment rate is expected to hold steady at 4.1%.

Key Insights and Metrics

1. Nonfarm Payrolls:

Many economists are forecasting growth of approximately 185,000 jobs. However, some are considering the possible influence of Hurricane Beryl, which could result in lower numbers. For instance, Goldman Sachs anticipates a decrease of 15,000 jobs but still foresees a net gain 165,000. In contrast, Citigroup is projecting an addition of 150,000 jobs.


2. Unemployment Rate:

The current unemployment rate is expected to stay at 4.1%. If it continues to rise and stays half a percentage point above the lowest rate seen over the past 12 months for three consecutive months, it could trigger the Sahm Rule, signaling a potential recession.


3. Federal Reserve's Perspective:

Federal Reserve Chair Jerome Powell stressed the importance of maintaining a delicate balance between supply and demand in the labor market. He strongly suggested that an interest rate cut in September could occur only if inflation indicators indicate positive trends. Powell expressed increased confidence in the economic data and suggested that a softening labor market could lead to potential future adjustments in interest rates.


4. Market Reactions:

Investors eagerly anticipate the release of the upcoming jobs report to gauge whether it aligns with Federal Reserve Chair Jerome Powell's positive outlook on the economy or indicates signs of potential overconfidence. The wage growth data is exciting. It is expected to reveal a 0.3% monthly increase and a 3.7% rise compared to the previous year, marking the lowest level since May 2021.

Hypothesis Formulation

Hypothesis 1: If US Non-Farm Payroll data shows a decline in job growth and an increase in the unemployment rate, then gold prices will rise due to increased safe-haven demand.

Hypothesis 2: If the Federal Reserve cuts interest rates in response to weaker economic data, gold prices will increase due to lower opportunity costs of holding non-yielding assets.

Hypothesis 3: Geopolitical tensions in the Middle East will lead to higher gold prices as investors seek safe-haven assets.

Data Analysis

1. Impact of US Non-Farm Payroll Data on Gold Prices

Data Analysis: Analyze historical gold price movements around the release of Non-Farm Payroll data. Correlate changes in job growth and unemployment rates with gold price fluctuations.

2. Impact of Federal Reserve Interest Rate Decisions

Data Analysis: Examine historical interest rate changes by the Federal Reserve and corresponding gold price movements.

3. Geopolitical Tensions and Gold Prices

Data Analysis: Track historical gold prices during periods of heightened geopolitical tensions, such as conflicts in the Middle East.

Prescriptive Analytics&Recommendations Based on Predictive Analysis

Scenario 1: Decline in Job Growth and Increase in Unemployment Rate
Recommendation: Traders should consider increasing their gold holdings if Non-Farm Payroll data indicates weaker job growth and higher unemployment. Safe-haven demand for gold is likely to rise, pushing prices higher.

Scenario 2: Federal Reserve Interest Rate Cuts
Recommendation: If the Federal Reserve signals a rate cut, traders should buy gold. Lower interest rates reduce the opportunity cost of holding gold, making it a more attractive investment.

Scenario 3: Increased Geopolitical Tensions
Recommendation: During periods of geopolitical instability, traders should increase their gold positions. Gold's role as a safe-haven asset makes it likely to appreciate in value during such times.

06/08
04:30 AUD Cash Rate

06/08
22:45 NZD Employment Change QoQ

09/08
12:30 CAD Employment Change