Forecast for the week August 28 through September 1:
This week we have unclear situation. On the one hand, gold rates are expected to rise due to large sales of US dollar. During her Friday speech on economic symposium in Jackson Hole, Janet Yellen didn't mention either the date of the next rate hike or the date of shrinking Fed balance sheet. Market had anticipated much more and for that reason we saw large US dollar sales. When dollar falls, gold feels well – this is the main intermarket connection, which has been observed for decades. On the other hand, there is still demand on risk assets, which is negative for gold. Index VIX S&P500 closed the previous week falling by 21%, that indicates growth in investors' optimism. In such cases gold is not highly demanded. Trading signals: flat 1280-1305.
The last week of summer will be positive for oil market for two reasons. Firstly, according to oilfield service company Baker Hughes, rig number in USA and Canada reduces two weeks in a row indicating oil production level drop in North America. Hurricane Harvey slamming Texas, witch ends a record 12-year period with no major hurricanes according to forecasters, gives bulls advantage. For this reason, price of gasoline futures in USA has risen up to four-month maximum. Now it's turn of oil contracts. Secondly, USDX drop will have a positive impact on oil price, as oil is quoted in US dollars. Trading signals: Buy 51,70/51,05 and take profit 53,51.
This week moderate growth of quotes may be expected due to sudden drop of USA state bonds yield. Now it's the single driver of stock market uptrend. Weak macroeconomic property sales statistics released last week made investors to review their optimistic expectations. Property market is an indicator of American economy health and now it shows that the economy caught a cold. Property sales fell for the first time in twelve months. If it wasn't for weak statistics, the stock market could have shown faster growth. Trading signals: Buy 2439/2425 and take profit 2460.