Sizeable moves lower in gold

Four key markets in focus today.


We saw a sizeable move lower in the gold price after the Chicago PMI came in much higher than forecast, with the precious metal subsequently falling to a low of $1319. The upshot of the higher Chicago manufacturing print is that tonight’s ISM manufacturing should hold up well, with the market currently expecting a read of 55.0 on this index, just down from 56.2 last month. An above consensus print could push gold closer to the former August 28 downtrend at $1274.


At 20:30 we get the latest read on UK manufacturing and while cable seems to be finding good bids at 1.60, there are signs that the USD is starting to find upside traction. The market expects a read of 56.4, which is still a strong level of expansion, however the pace of expansion is falling given we saw the index print 57.1 last month.


I am watching 0.9428 (the 38.2% retracement of the 0.8893 to 0.9607 rally) on AUD/USD and a break of this level could push the pair towards the 55-day moving average at 0.9324. At 12:00 we get China’s manufacturing PMI report and the market expects a modest slowdown in the pace of growth to 51.2 (from 51.3). It could also be worth keeping an eye on Korean trade balance as many see this as a good leading indicator for Chinese exports, which are due out next week.

Macquarie bank (MQG)

Macquarie reports 1H 2014 earnings today and traders will be hoping for good numbers to keep the strong uptrend in place. The daily chart on MQG is a thing of beauty with traders buying dips at any occasion. The prospect of the bank reiterating its view that they will see an ‘improvement’ in 2014 earnings is high, although it has to be said the market is already pricing that into the stock. Any updates on excess capital, costs and tax will be interesting.

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