Sell XAU/USD | 13 January 2017

Forecast for the week from January 9th to January 13th:

XAU/USD:

Consider selling gold during this week for two reasons. Firs of all, I expect US dollar quotes growth, that traditionally puts pressure on gold. The US macroeconomic statistics of previous week indicates that the Fed might continue raising interest rates. Of course, Fed may stop raising interest rates in 2017, however market always responds to rumors before perceiving the facts. Thus, rumors play into hands of US dollar, as for the facts, we will find them out later. Second of all, quotes growth on the biggest world stock exchanges also influences gold negatively. American stock market is now close to its historical high and is striving for new heights. Trading recommendation: Sell 1176/1186 and take profit 1157.

Brent:

To my opinion, one should sell oil this week because increase in US oil output. Baker Hughes Friday report shows rising production capacities. The total number of drilling platforms is 529, for comparison last year there were 516. However, the most important fact is that there is vertical drilling rigs increase by 4; these are the most effective rigs for oil output. I would not expect a reversal of uptrend, however technical correction is highly likely. Trading recommendation: Sell 57,40/58,50 and take profit 55,80.

S&P500:

This week one might expect quotes growth for two reasons. First of all, there is still an appetite for risk on financial markets: Volatility Index is close to its 2016 low, that indicates rising optimism on stock markets. Positive American macroeconomic statistics along with a drop of Treasury bonds yield plays into the hands of investors. Previous week the leading index growth-wise was Nasdaq, which exceeded broad market index by 1.5 times. That confirms investors risk appetite, as Nasdaq includes securities with high P/E. Second of all, consider taking note of December US retail sales data release at the end of the week. Because of the CB positive index of consumer certainty the retail sales data release might be more optimistic than expected, that, in its turn, will have positive impact on shares value. Trading recommendation: Buy 2271/2260 and take profit 2283.