Gold Breaks Through $1,300 For First Time Since June
Gold (NYSEARCA:GLD) is on the move. For the first time since breaking down below its 50 week moving average June of last year, the precious metal has broken the psychologically important $1,300 level. Gold broke back above its 50WMA in the last week of 2018 and is now approaching oversold on the 14-week RSI. Whether the lows are on or the highs are in depends on how gold performs at the $1,311 level, the next area of significant resistance. If it breaks through, then the next resistance zone is at $1,370. Silver (NYSEARCA:SLV) has followed suit, on the border of breaking out to new highs since breaking down last July.
Also in gold news, China has added 10 more tons of gold to its reserves, while paring holdings of US Treasuries for 5 months straight, now down to $1.14 trillion. This is down 5% from a recent peak in October 2017 and could be signaling China’s intention to decrease dependence on the dollar as trade tensions escalate between the two countries. China’s gold reserves are up 76% since 2015.
Economic Calendar This Week
Nothing much happening on money on the economic calendar, but we do have earnings from AT&T (NYSE:T), Facebook (NASDAQ:FB), and US Steel (NYSE:X), including other big earnings this week from Amazon (NASDSAQ:AMZN), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) .
On Tuesday we have the Case Shiller 20 gauging the real estate market that has been showing signs of slowing down of late as mortgage rates have gradually risen since the Fed started hiking rates. Consumer confidence will also be reported.
On Wednesday we have yet another Federal Open Market Committee rate hike decision. There is virtually no chance of the Fed raising rates again on Wednesday, as it would totally freak out markets only slightly less than a direct UFO invasion of Wall Street itself. On Wednesday we also have 30Y mortgage rates, currently holding at 4.75%.
On Thursday, Personal Consumption Expenditure prices, the gold standard for inflation measurements. And jobless claims.
Friday will see unemployment, 5-year inflation expectations, and non-farm payroll numbers. It’s a busy week.
Shutdown Over, For Next Three Weeks At Least
Congress passed a three-week stopgap spending (borrowing) bill last week, ending the longest partial Federal government shutdown ever, but Nancy Pelosi still won’t let Trump deliver the State of the Union Address. This could get interesting. While President Trump insists that he has not caved on the issue of the border wall, it seems unlikely that he will shut the government down in 3 weeks because why accede now if you have the intention of restarting the clock in three weeks anyway? If he does he’d probably get the blame for upsetting the apple cart twice.
DB in the Doghouse
Deutsche Bank (NYSE:DB) may be getting a lifeline from the Qatar Sovereign Wealth Fund, which apparently thinks that investing in a bank under investigation for the largest money laundering operation in world history is a good idea. The bank has never really recovered from the financial crisis of 2008 and keeps mounting up losses among other embarrassing raids of its offices in criminal investigations, not to mention that the Democrats are now showing interest in the bank’s book because Deutsche is a known lender to the Trump Organization and may be hiding evidence of links between the Trump Administration and Russia. If there are any.
Marijuana Exports Start in Israel
Israel will be exporting medical cannabis products around the world, now that its Parliament has said its OK to do that without being thrown in prison, which is nice. The main reason, besides governments around the world loosening their iron grips on the cannabis industry, is that the Israeli government thinks that this will earn them NIS 1 billion more annually, though “earn” is a bit of a problematic term, since the government will be taking that money from private companies under strict regulations and threatened jail sentences if they don’t comply exactly. But this sort of bullying is considered progressive these days, and it is better than forbidding cannabis trade entirely.