Ray Dalio still believes in gold (2)

The main reason for declining interest and appetite for gold is the fact that the noble metal does not fulfill its function of a protection asset. Gold prices dropped in February after massive sell-offs on the stock markets, continuing to fall over the next few months, amid the recovery of indices aimed at testing their peaks.
In addition, the appreciation of the dollar, in the midst of two Fed interest rates, was another factor triggering a fall in the price of gold.
The strong growth of the US economy, in an almost full employment environment, allows the Fed to think of two more interest rates this year.
Of course, there are serious prerequisites for the Fed to refrain from one of the two potential interest rates, in a climate of global geopolitical uncertainty and the growing trade war between the US and China.
Gold broke the key level of support at $1,205 and went down to the next major $1,194 support. At this stage, the latter level manages to limit the further depreciation of the "yellow metal". According to technical analysts, however, a break of $1,194 may open the way for a further decline to $1,181 an ounce.

Ray Dalio still believes in gold (1)

The billionaire investor and founder of the world's largest hedge fund, Ray Dalio, retains his belief in gold. That happens, despite the sharp decline in the metal, which today reached a new low for the last one over a year - down to less than $1,290 per ounce.
Dalio, who runs the Bridgewater Associates, has kept its stake on the two largest index-traded funds on gold by June 30, despite the fall in the metal.
By today, Dalio has 3.9 million shares of the largest exchange-traded index fund based on the gold price of SPDR Gold Shares and its 11.3 million shares in the second largest fund - iShares Gold Trust, according to data of regulators.
For the three months until the end of June, investors in gold-based index funds recorded serious losses, resulting in more than $1 billion in both funds being withdrawn. This was also the first quarterly outflow of funds from the gold funds since 2016.

The fall of the bitcoin and the other cryptocurrencies may be good news for the cryptomaniacs?

The depreciation of bitcoin and other cryptocurrencies may be good news for the cryptomaniacs. For example, the ripple is traded at levels not seen since the autumn of last year just before it erupts and increases its value 10 times. The question now is whether the ripple will be able to return quickly over the psychological limit of 30 cents, or its decline will continue.
Quite similar is the situation with the ethereum. The digital currency is at its lowest levels since April, after a peak of $1,400. From a technical point of view, the ether is in a strong downward trend after overcoming the lower limit of a narrowing triangle.
On its way down, the ethereum does not have many obstacles, and its decline may increase if we see a drop below the $300 psychological barrier that temporarily limits its depreciation.
A very serious decline was recorded by the bitcoin cash. It is traded at levels of about $570, and its decline may increase if we see a breakthrough in the key support level at $550 for a coin.

Ripple again under 30 cents

Remember the ripple mania at the end of last year? Then the cryptocurrency rose from 25 cents to 3 dollars. In just a few weeks.
Now things are the same again. The ripple has returned back to less than 30 cents. Will, however, it have the power to rise again at a similar pace? Hardly...
The record-breaking decline in cryptocurrencies continues. An exception to this negative trend is only the bitcoin, which is sustained at levels above $6,300.
The depreciation of the cryptocurrencies began after the US regulators refused to issue a permission for an index fund license based on the Winklevos brothers bitcoin.
The decline in the digital coin has intensified after US Bank Goldman Sachs commented that we can see a further decline in the bitcoin.
Later on, the fall of the cryptocurrencies accelerated after a massive wrong bet of $416 million in bitcoin futures that remained uncovered after the fall of the cryptocurrency.

R. Schiller: Investors to be careful with US Indexes!

One of the most respected economists and winner of the Nobel Prize for Economics, Robert Schiller, warned investors about US stocks.
Based on the cyclical cost-benefit ratio (CAPE), Schiller believes that US stocks are expensive. The index is calculated on the basis of the S&P 500 price divided by the average annual earnings of its components over the past 10 years.
According to some analysts, when this ratio is close to record values, similar to those of 1929 and 2000, the market is shrinking.
Currently, the CAPE ratio is close to 27x, which is well above the average of 15x and near its record highs.
The last time the ratio was at such high rates was a decade ago, followed by a substantial drop in stock prices, according to Oliver Jones and John Higgins of Capital Economics, in a letter to their clients.
Long-term investors must be warned, Schiller claims.
But Schiller recalls that this indicator is not very good at predicting market slumps. In other words, it is entirely possible that the index will continue to rise before it drops significantly.

Evans: One or two rate increases are absolutely reasonable

The US economy is performing "very well", with its continuing growth creating preconditions for one or two interest rates rises this year, according to Fed Chicago chief Charles Evans.
In an interview, Evans scattered fears of weaker inflation, which led analysts to forecast only one, or even none, raises in interest rates by the end of this year.
We may see one or two raises, Evans said. In December, Evans publicly opposed the rise in interest rates on the part of the Fed. Since then, we have seen two interest rates rises - one in April and one in June.
Evans, however, said the US economy was extremely strong, and its performance made him confident that inflation would hold or even cross the target of 2% while the unemployment rate would remain at its low levels. The growth of the world's largest economy is expected to range between 2.5% and 3% this and next year.

Oil with heavy losses

Oil has serious losses yesterday, following the escalation of US-China trade pressure.
China said they will not surrender and have imposed new import duties on US goods worth over 16 billion dollars. At the same time, Trump threatened to impose $200 billion in customs duties on goods.
This has triggered a drop in brent of over 3%, to below $72 a barrel, on international markets. Earlier today, the raw material recovered some of its loss by adding 30 cents to 72.50 dollars a barrel.
US crude added 20 cents to $67.10 a barrel after a loss of 3.2 percent yesterday. To a large extent, oil prices are supported by fears that Iran's new sanctions will lead to a decline in supply.
Investors' fears are that the US-China trade war will enter the final phase, and the stake for both sides will be "all or nothing". And this, in turn, would lead to a serious slowdown in the US economy.
China is the largest importer of crude oil in the world, with an average of 8.48 million barrels a day, 8.18 million barrels per day a year earlier and 8.36 million barrels in June.
The US energy agency said yesterday that oil reserves had fallen by about 1.4 million barrels last week. However, gasoline stocks surprisingly rose by 2.9 million barrels.

The bitcoin encounters serious difficulties, falls below 7000 dollars (2)

The risk-management team of the exchange immediately contacted the client, with the requirement to partially close the position to reduce the risks. The client, however, refused to cooperate, which triggered the decision to freeze client assets. Shortly thereafter, however, unfortunately the cost of the bitcoin dropped, which led to the liquidation of the account, the stock exchange said.
The stock exchange said they would redirect 2,500 bitcoins worth $18 million at current prices in an insurance fund to reduce the risk of such cases.
From OKEx, where their customers first agree to stock market conditions before they trade, they said they intend to make changes to their margin requirements after this.
The exchange, which is ranked 2nd amongst cryptocurrencies stock exchanges, against a commission, allows its clients to leverage 20 times the amount of their funds.
On Friday, the bitcoin, the biggest cryptocurrency, lost 2.2% of its value to a level of $7,383, bringing its weekly loss to 10%. Since the beginning of the year, the bitcoin has lost 48% of its value.

ActivTrades Education: Free Webinars

The leading independant on-line broker ActivTrades offers to its clients excellent free webinars, which help traders improve their trading strategy. The webinars are held by leading professionals.
See how you can develop new trading techniques in the financial markets. Be well informed about market fluctuations and learn to read between the lines of technical charts.
The subjects of the educational events are various, from analysis of upcoming fundamental factors, through trading psychology, trading tools and technical analysis lessons.
To find all free webinars and to register, please follow this link.

The bitcoin encounters serious difficulties, falls below 7000 dollars (1)

A massive bad bet on bitcoin futures has led to a trader not being able to cover his long-term losses on the Hong Kong Stock Exchange. And that points to everything wrong with the trading of futures on cryptocurrencies, which many experts fear.
In a statement by the exchange on Friday, it is clear that the trader's stake is worth $416 million. The exchange liquidated the position on Tuesday but failed to collect the amounts due from the trader in the price drop. Because of the case and social rules, the stock exchange will force traders with unrealized gains to lose 18% of them.
The stock exchange said only that the troubled position was opened on July 31 at 2am.
This case comes to remind traders and investors of the risks associated with trading in unregulated or poorly regulated markets. Such cases are almost impossible to become a reality on regulated markets on which stocks and bonds are traded.
Cryptographic platforms are subject to hacker attacks, market manipulations, and more. Their weak regulation is largely the basis of the ability to manipulate the cost of the bitcoin and the other cryptocurrencies.

The dollar is rising, the metals are collapsing

Contrary to popular beliefs that the dollar is cheaper in times of trade wars, we are seeing the extraordinary strength of the US currency. Earlier this morning, the euro fell to 1.1560 against the dollar and is about to test the critical support at 1.1500. What will happen after this test will most likely depend on the medium-term movement of the single currency.
Otherwise, green money reached a 14-month high against the yuan. China urged a vengeance on Thursday if the US threatens to raise tariffs on exports of Asian-produced goods after US President Donald Trump instructed his trade officials to consider raising customs duties on imported Chinese goods from 10 to 25% of Chinese goods for $200 billion.
But as the US imports much more from China than China from the US, investors see the deployment of the trade war, causing worse trouble for the Chinese economy.
Serious problems due to the appreciation of the dollar have metals. Gold went down this morning near the psychological limit of $1,200 per ounce. Silver is traded at 16.20 dollars per ounce and platinum at $823.

Apple with capitalization over $1 trillion, growth for US indices

The big news of yesterday's day is the rise in Apple's market capitalization above the psychological limit of $1 trillion. The question now is, how long will the tech giant hold there.
The US indexes ended yesterday mainly on positive territory.
Best results, of course, had the technological Nasdaq. Driven by Apple's appreciation of 2.8%, the index added 1.2% to its value.
The broad S&P 500 added 0.5% to its value, while the blue chip index Dow Jones recorded a drop of 7 points.
The yield on 10-year US bonds declined again below 3%, although it remained extremely close - at 2.986%. Interest on long-term 30-year government bonds reached a level of 3.118%.

Nothing new from the Fed. How did the markets react?

Fully expected, the Fed kept the interest rate unchanged, with Powell emphasizing the good state of the US economy. This was taken as an impulse to preserve the policy rate of the interest rate reserve.
This negatively affected the US indices and sent the dollar upwards, initiating a decline in metals and raw materials.
The Dow Jones blue chip index lost 81 points, with its most lost components being the industrial Caterpillar and 3M lost 3.4 and 2.3%.
The broad S&P 500 declined by 0.1%, with the industry declining by more than 1%. The Nasdaq Technology reduced its value by 0.5%.
Global financial markets continue to focus on a US-led trade war, especially after the White House administration announced on Wednesday that President Donald Trump offered a higher 25 percent duty for Chinese goods totaling $200 billion.
The euro fell slightly by 0.1%, to 1.16505 dollars.

The Japanese central bank laid the foundation for the yen to fall

The Japanese yen is expected to depreciate against other major currencies, including the US dollar, after the country's central bank did not take action to curb its record monetary stimulus.
After the Japanese central bank meeting, Haruhiko Kuroda announced that the key interest rates in the country would be slightly increased, but did not mention anything about changing the monetary policy of the bank and record monetary stimulus.
Kuroda clearly said this morning that in an environment of continuing low inflation, the central bank has no intention of raising interest rates and will continue to maintain its incentives until targeted inflation is reached.
This largely disappointed investors and traders who were betting on a change in central bank policy. The yen, which had registered a significant growth against the dollar and the rest of the currencies, returned almost everything earned.
Earlier this morning, one dollar swapped at levels of about 112.00 yen.
Kuroda clearly said this morning that in an environment of continuing low inflation, the central bank has no intention of raising interest rates and will continue to maintain its incentives until targeted inflation is reached.

Oil ended July with an increase of between 6 and 7%

Speculation to find a solution in the Red Sea, as well as data on surging oil stocks, contributed to the decline in oil prices. We can recall that at the beginning of the week, the Brent almost reached the 75-dollar barrel again.
Concerns about the deepening US-China trade war, and the potential slowdown in Asia's economic growth, have led to a 30-cents loss for Brent up to $74 a barrel.
Losses of nearly 40 cents were also recorded by US crude oil futures. Together with the fall of Tuesday, the drop in oil is already close to 2%.
Yet, July was a good month for oil. In the seventh month of the year, Brent added 6% to its value, and US crude oil - nearly 7%.

Trump/Yen, Yen/Trump

The Central Bank of Japan apparently took seriously Trump's warning to its main trading partners - not to try to manipulate exchange rates.
According to well-known sources, the central bank of Japan is said to change its monetary policy. The explanation is - to make it more effective. Market participants, however, fear that its preparing for normalization is becoming a reality.
And this led to a fall of the Japanese Nikkei 225 by nearly 300 points and a serious appreciation of the yen. The dollar, which reached trading levels of 113 yen in the past week, traded at levels 111.18 on Tuesday evening.
Indeed, the dollar marked its largest decline against the main currencies for three weeks. The dollar index lost 0.8% of its value on Friday, with the loss of 1% against the yen, the US currency declining 0.7% against the euro.
The bond repurchase program was launched by the head of the Japanese bank in the distant 2013. The aim was to raise inflation.
Now, however, according to experts, the Japanese central bank has to make a lot of effort to persuade Trump's administration that it does not artificially lower the exchange rate of the yen against the dollar.
On the other hand, it appears that 2% inflation targeting the bank is an unattainable goal, even against the backdrop of serious monetary stimulus. Buying bonds, however, has led to an increase in government debt of over 40% over the past five years. At the same time, the goals of the Japanese central bank do not seem to be achieved. And this largely points to the ineffectiveness of the bank's policy.
Interest rates on 20-year Japanese government bonds also rose 6 basis points to 0.535 percent, moving away from their 18-month minimum at 0.475 percent earlier this month.
It has to be mentioned that the currency war is already a fact, as a continuation of the trade between the US and China. On Friday, President Donald Trump accused the major trading partners of the US of manipulating their exchange rates and thus receiving unfair competitive advantages.
We can recall that the trade war between the two leading economies started earlier this month, with the imposition of reciprocal duties on goods for $34 billion.

Strong growth in Europe and Asia after good results from Google

The US indexes ended yesterday's stock market upwards, prompting Asian and European markets to open on a plus today. The growth of European markets, however, was far stronger. The German DAX has risen to levels of trade of nearly 12,700 points, or an increase of over 1% compared to yesterday.
Opening on a positive territory is also shown by US index futures, with the S&P 500 trading at levels above 2,816 points.
To a large extent, the positive mood contributed to Google's results. The parent company, Alphabet, reported yesterday quarterly earnings of $32.66 billion, an increase of 26 percent and acceleration in the same quarter of last year. For comparison, revenue growth in the second quarter of 2017 was 21%.
After the results, the company's shares rose 5% and Alphabet's market capitalization was almost equal to Amazon's. For comparison, Amazon's market estimate is at $874 billion.
Still, Apple's shares remain closest to the boundary line. After good news about the company, its stock continued to rise and its capitalization is already close to 942 billion dollars. So Apple is only about 6% of reaching the coveted $1 trillion, which has not been achieved by any company in history.
So far, more than 17 percent of S&P 500 companies have announced their second-quarter results, with 82 percent of analysts expecting analysts to expect, according to FactSet. Wall Street has high expectations for this reporting season, with analysts forecasting an annual growth of 20%.

Oil is resuming its decline

After yesterday's recovery, the price of oil went down again today. Brent with delivery next month was traded at levels of $73.30 by noon. The risks of oversupply of raw materials have begun to dispel concerns about tensions between the United States and Iran.
Yesterday, the President of the United States addressed the Iranian president a serious threat to Twitter, which was repeated by other officials of the government. All of this, bent market participants, to the expectation of further oil supply problems. It rose to $74 a barrel, but failed to keep up on that level and began to fall again.
Saudi Arabia and large producers are increasing their yields to offset the losses likely to come as the deadline for imposing sanctions approaches.
Meanwhile, US pil reserves at the supply center in Cushing, Oklahoma, increased at the end of last week, retailers have reported, referring to information from the Genscape Market Research Agency.
In the last week of the month, however, inventories in the center are expected to drop, add traders. Further clarity on the state of supply is expected to be made tomorrow after the data on oil stocks in the world's largest economy.
The attention of market participants has moved away from escalating disputes over the impact of world trade on global economic growth and the demand for energy sources and raw materials.
Over the weekend, the G20 financial leaders voiced concern about the global economy's risk that may be the trade strain between the United States and China.

Bears rule: the market on Friday found no reason to rejoice

On the evening of Friday, the US dollar lost against the euro and let it grow. The main currency pair is above 1.1720. The risk for the euro is Italy with its political imbalance, besides some of the politicians again mention the possibility of the country's exit from the euro area - this is not the driver at which the single European currency can rise in price.
In oil, the "bulls" are trying to win back part of the weekly sales, but in the last couple of weeks, no one has gone up for black gold effectively. A barrel Brent opens the week with worth about $73.07, the resistance is at $73.50 and $73.75 respectively.
The gold closed last week near historically low levels, at a price of $1,233.60.

Why was the dollar spared by the trade war? (2)

Last month, the ECB reaffirmed its non-aggressive policy, which helped renew the dollar's appreciation. The euro fell 0.7 percent against the dollar at the ECB meeting on June 14. Then the dollar rose the most against the euro in two years.
The outlook for the US economy is the best among developed economies, according to Marvin Loch, chief strategist at BNY Mellon. The Fed remains the most aggressive in its tone, compared to the other central banks around the world. Since the beginning of the year, the Reserve has raised the interest rate twice, and is expected to make two more hikes until the end of the year.
At the same time, the ECB is unlikely to raise interest rates by the end of the year, barely stopping the stimulus for that period.
In addition, credibility among bullish investors for the euro is diminishing as a result of the emerging trade war between the US and Europe. Experts point out that serious threats to foreign exchange markets may be an extraordinarily high short-term growth in the US economy, which would trigger a further strong appreciation of the US currency.
Investors continue to worry about the minimum slope in the interest rate curve, which continues to raise fears of an impending recession.