Gold climbs to one-week high after inflation slips

Gold up $15 to $1808 today

Falling inflation and declining Treasury yields are good news for gold bugs.
The yellow metal has risen to the best levels since Sept 6. Early in the day it had touched the worst since Aug 25 so it’s shaping up to be a bullish outside day.
Gold up $15 to $1808 today
In the bigger picture, you could argue a triple top at $1835 or an inverse head-and-shoulders with a neckline there.
In any case, this is clearly a range trade for the moment but if we get a close at these levels, the bulls will have the upper hand into the FOMC decision.

84% of respondents expect Fed to taper before year-end – BofA fund manager survey

Findings from the latest BofA fund manager survey

  • Global growth expectations lowest since May 2021
  • First Fed rate hike expectations seen at February 2023
  • Equity protection at the lowest since January 2018; liquidity conditions viewed as the best since before the 2008 global financial crisis

If anything, this is more of a sentiment indicator and shows how the market is roughly positioned and well handled to receive any taper announcement by the Fed in the months to come. As mentioned before, the timeline for the moment fits with:

  1. Acknowledgment of (start of) taper discussions in September
  2. A formal taper announcement in November
  3. Tapering to likely begin in December
Of course, it all depends on further economic data in the weeks ahead and we’ll be getting a big one today via the US CPI report later at 1230 GMT.

IEA says progressing vaccinations should unlock pent-up demand for oil in Q4

IEA remarks in its monthly report

  • Vaccine rollouts should help to unlock stymied demand for oil, especially in Asia
  • Signs that COVID-19 cases are abating should see demand rebound sharply by 1.6 mil bpd in October and continuing to growth until year-end
  • Unplanned outages from Hurricane Ida offset increases by OPEC+
  • Estimates that global oil demand fell for three straight months to date amid the COVID-19 resurgence in Asia
  • Adds that the market should shift closer to balance from October if OPEC+ continues to unwind output cuts
  • By early 2022, supply will be high enough to allow oil stocks to be replenished

A good summary on the oil market situation right now as delta variant concerns are still persisting but less impactful as what we saw over the past few months. Adding to that is the hype surrounding fossil fuels amid a cold winter and higher energy prices.

Oil is up 0.8% today and testing the $71 mark as buyers look to build on a daily break above $70 in trading yesterday.

The Litecoin fiasco overnight

The fact that it came through such a big source (globalnewswire) made it “believable” at first glance and got the market excited. But just as it was quickly tweeted, it was also rather quickly debunked and that sent Litecoin back down to earth in the aftermath.

A bigger mistake was on the part of Litecoin in tweeting further about the deal, as though confirming it – which turns out to not be the case.
Here is how Litecoin is doing now after the major fiasco:

Oil – US Gulf copping it again, this time Tropical Storm Nicholas

The US oil industry is still struggling to recover from the damage from Hurricane Ida.

Circa 40% of capacity is still compromised.
Now a new storm is slowing efforts at recovery, at least this one does appear to be as intense as Ida. Tropical Storm Nicholas may gather intensity though, the US National Hurrican Center say:
  • A Hurricane Watch is in effect for…* Port Aransas to San Luis Pass Texas
The US oil industry is still struggling to recover from the damage from Hurricane Ida. 
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