Forecast for 12 - 16 of October:
Despite the negative fundamental background, the "yellow metal" does not intend to fall down. It should be noted that last week growth of quotations was observed on the whole commodity market. This factor is caused by weakening of the US currency, changes in expectations after revaluation of monetary policy by the US Federal Reserve. FOMC, frightened by low inflation and possible slowdown of the world economy, decided not to raise interest rates and that caused closure of long positions with the US dollar and had a positive impact for the commodity prices, as their cost is denominated in the US currency. In the first half of the week uptrend in gold may continue, as the precious metal will follow oil. Growth of hydrocarbons quotations increases inflation expectations, which usually has a positive effect for the "yellow metal". WTI updated its 2015 August High, Brent is little behind its US counterpart and will catch up. In this context, we can expect growth of quotations of Brent crude oil to $ 55/barrel, which will push gold to the level of $ 1165/ounce. Further, in my opinion, the precious metal may get under a wave of sales. Despite upsurge of oil prices by more than 9% in the last two weeks, the long markets of the G-7 members has not recorded a notable growth of yields of the 10-years' government bonds, which reflect investors' expectations on inflation. The record of meetings of the US, UK and Eurozone central banks, which was published last week, shows a weak growth of consumer prices. This week we should expect the flat within the range of 1125 -1165.
XPT/USD and XPD/USD:
During the week, platinum group metals may show a mixed trend. Platinum (XPT/USD) is still an undervalued asset against the overall growth of the commodity market, as well as September's positive data on car production in the United States and China. In my opinion, it is possible to expect growth of quotations to the psychological level $1,000 per ounce, after which investors will take a break to assess the outlook of a further uptrend. On the other hand, Palladium (XPD/USD) will show a moderate downtrend. In my opinion, this tool has already accounted growth of car production in the United States and China as well as demand in this asset. This trend points to the fact that at the end of last week palladium has consolidated in a lower pace than all the rest industrial metals. Investors are not willing to build long positions at current levels and at such times the market has usually been going through a technical correction.This week we should open Buy position with XPT/USD on decline to 971/969 and Take Profit at 999 and open Sell positions with XPD/USD on growth to 714/724 and take profit around 688.
The United States started the season of corporate reporting. First, according to a tradition, the aluminum giant Alcoa reports about its figures. These figures went rather negative - Net income was decreased by 70% compared to the same period of 2014, to the level of 49 mln. US dollars. This week the company will report about its financial and consumer sectors, which can also disappoint investors by weak data. Financial companies suffered loss against significant correction in global equity markets due to the collapse of the "Chinese bubble". Companies of the consumer sector are taking the risk of revaluation of the US dollar. Such corporations as Johnson&Johnson and Unilever actively work on foreign markets, and growth of the national currency reduces competitiveness of their products. In this connection, it is possible to expect development of correction after two weeks of growth of the prices. However, you should not expect active sales now. Despite reluctance of the FOMC to change its monetary policy, in the world there is a steady demand in risky assets. This week we should open Sell on S&P500 expecting growth to 2016/2035 and take profit around 1972.