GOLD LACKLUSTER TRADING

Not the Currency of Last Resort as it used to be! (until when?)

The precious metal is indeed losing its luster with current prices @1175.46. A re-test of the low @1130.10 is underway with no sign of fresh buyers at this levels.

During earlier times, when we hear Russia is in the market buying gold, a bunch of chaos and a buying frenzy can be seen among traders. Apparently, those days are likewise gone. Even if news of Russia piling up gold reserves including other central banks would encourage some market activity to push prices higher. For now, we can safely say that stocks weighs heavier in value, especially when positive earnings are still coming out from market reports. Foreign currency value on gold are depressed with the effects of a stronger US Dollar. As long as the USD corrective move would not go below its more important benchmark for the 2nd quarter; this maybe too early to make a price call.as negative effects on gold would weigh bearish until a solid consolidation can be made at a reasonable base price 

Perspective & Insight: EUR GBP JPY Majors & Crosses

On a 'Grand-scale Price Action Analysis'; there exist a similar view where the Euro/Yen (EURJPY) cross rates & USDJPY shows a directional market significance particularly with Asian traders. With the Euro's slowing inflation rate there is much to anticipate that the extended market consolidation on the USDJPY may soon prove to be a worthwhile waiting game for some positively motivated Asian traders & investors.

The daily & weekly price consolidation on the USDJPY remains to be @101.05/10 (S1) to 102.60/80 (R1) since February 2014. While the USDJPY held these price range; Sterling's ability to hold versus the Japanese Yen (GBPJPY) has had the similar effects of the run from a low @137.80 in 03.2013 to this period today @173.30. And much of the currency pairs traded have evolved around these pairs alternating moves as trend-following strategies where applied.

With that said, most US & European investors have been trying to weigh & setting aside a lot of market distortions from the geopolitical tension lingering-on in the European & Middle-East conflicts while still focused on the recent correction on the Dow Jones & S&P markets. And somehow manages to pullback from their daily low ranges and likewise finishing the day sessions with barely a double digit decline. These moves are part of a technical price alignment primarily based on the recent reports for jobs and a surprising housing contraction that led the pace for the decline.

To a certain extent that this similarity had also occurred with the overall picture perfect for Cable after a wide trading range breakout beyond the 1.6745/60. And registering a high @1.7192 before the current corrective move to as low as 1.7035; while the EURUSD recent high @1.3700 on 07.01 have prompted the single currency pair to its present lower levels @1.3522 as of this writing. As both majors have shown their respective resiliency to stay above these levels, one can not discount the probability that these currencies may still hold some underlying strength in moving forward contrary to its corrective phase which is likewise still in the making. Key levels to watch for CABLE still remains @1.6970-1.7000 range support and as for Euro is initially set @1.3450/70 to its current market rate @1.3520.

Highlights for the Week

Jul 23   
Australia Consumer Price Index 01:30 GMT     3.1% Consensus     2.9% Previous
Bank of England Minutes
08:30 GMT
Bank of England Gov. Mark Carney Speech
11:45 GMT
_____________________________________________

Russian Business: Not a matter of who gets hurt more!

With the ongoing political rift between Russia, the US and European leaders; the direct impact for Russian billionaires and their respective businesses can only compound in the very near future. The market conditions have started to shave off several millions or billions of market valuations from the past month alone.

Russia's economy was already weak going into the crisis, a 1.3% expansion from last year would over-ride and writte-off including the forecast for a 2% growth for this year. The ruble has lost 9% versus the USD making imported products too expensive for an average Russian employee.

Vladimir Potanin (metals business), is worth around $14 billion, worries about additional sanctions while precious metals prices have dropped from post-FOMC statements. Although, most of the companies he owns and claimed that they are using "multiple currencies" to diversify risk. And not only does Putin considering to look at Asia, these Russian businesses may likewise also consider diversifying and looking at the same direction.

The foreign exchange market's diversified networks of banks in Asia may also be considered (done right) and an alternative route for them. Private companies with diverse orientation on the financial markets may best serve these purpose for some of those Russian businesses that does not have any serious or real current ties politically. This is an awkward position for most, where they have been put into a tighter spot with the call of President Putin to pay-up their respective taxes that can only help the Russian government and try to ease the impact of these sanctions in the very near future.

These tensions would be continuing and sad that other main street businesses and investors would be directly affected with uncertainty to top it all. A majority of these financially well-off businesses has to make their move sooner than later. Exploring a variety of financial engineering would be to their advantage even for the average Russian businessman, who simply has to take care of business for the family, which comes first. Everyone in main street looses in these kind of conditions.