Gold Updated Chart

Corn in Modern Economy !!

Consumers and investors do not fully appreciate the extent to which the modern economy is based on corn. It is not just a substitute for gasoline and animal feed, but a full three quarters of the products in a supermarket use corn in some form. Corn Syrup?


Roughly 50% increase in corn prices translates to a 1% rise in shopping bills according to economists at the USDA. The effect on specific food prices vary. It takes, about 2.6 pound of corn to produce a pound of beef. That means that the increase in corn prices may see a 4-5% increase in beef prices. The increase in the price of corn chicken feed will boost egg prices 1-2% and a 2-3% increase in dairy prices.

The Politics of Economics.

OECD GLOBAL CURRENCY VALUATION (JULY 2012):

(Organization for Economic Co-Operation and Development)

Swiss franc is more than 34% over-valued.

Yen is more than 25% under-valued.

Brazilian real is 12% under-valued.

Chinese yuan 54% under-valued.

Indian rupee is more than 188% under-valued.

EURO:

Impact of zero deposit rates in EU impacts Northern banks more than peripheral banks, as Northern European banks use Target 2 to deposit their funds overnight, but not the peripheral banks, because they don’t get any interest.

Euro moves in the same direction as the US-German 2-year interest rate differential.  The premium the US offers over Germany is around 28 bp, its best level since late 2007.

Euro bears are buying protection for their short euro position by buying calls.

FRANCE:

Peugeot announced 8k cut in jobs on top of the 6k previously announced.  Other companies are also planning layoffs.  The French government is said to be planning another aid package.  

SPAIN:

Announced 3% point hike in VAT much to public dismay.

Tourism which accounts for 10% of country's GDP is showing signs of waning much effected by Austerity measures and EU crisis. More and more people are avoiding Greece, Spain and Italy as their destination because of the spoiled spirit and open hatred towards globalization and American Capitalism, by the people in these countries.  Nobody want to face hostility when they are on vacation in a foreign nation.

VAT rise would hit manufacturing industry sales.

ITALY:

Downgraded to Baa3 from A3 by Moody's, they are most exposed to Greece exit or further borrowing from Spain.

CHINA:

China has shifted from an export oriented economy to consumption oriented economy aka America. New large Capital Investment have reached the point of diminishing returns. Additional monetary stimulus is likely in coming months.

AUSSI:

String of poor data has suggested a rate cut in the beginning of next month. This might start to get factored in the remaining half of this month.

GOLD's Present View

WEEK 2 - JULY

Screen clipping taken: 08-Jul-12 10:26 PM

WEEK 1 - JULY

Screen clipping taken: 7/2/2012 5:57 PM

WEEK 4 - MAY

Screen clipping taken: 5/29/2012 7:33 PM

Two possible buy points for today:

GBPUSD and EURUSD:

Present Economic Policy

Introduce money in Economy in form of QE to keep Interest Rate low, so that business houses borrow, spend, consumers consume, banks lend, people borrow and to 'boost economy'. What happens? Inflation sets in and Governments are forced to raise Interest Rates to curb it.

Day 14

I already have a standing buy at 134 from Monday the 13th, would put SL at BE if it gives so and plan to float it for rest of the day/week or TP at 135.50

Weekly candle is bullish engulfing with Monday closing, price broke last week's high but didnt close above it so it can still retrace before going higher.

Upcoming Week 3: Day 13

Chart 1 is a Weekly Chart, followed by a monthly view of EUR/USD.

Last week was a Bearish Engulfing Candle negating the pin bar formation a week before that. This voids the bullish pin bar formation in weekly and brings the bearish pin bar in monthly chart into front play. I expect Eur/Usd to fall further for rest of the month. Monday and Tuesday candle is crucial. If we see a clear bear candles on both these days with a body size (opening to closing price) of 75 pips atleast than this would give us a clear confirmation for rest of the month.

But with the holiday season approaching fast, we may see a muted movements in market and could follow up on bearish trend from next month.

On Monday I will look for a gap in opening price from last Friday and would try to take a trade their, if no substantial gap is present that I would wait for Monday close to see the candle formation on daily chart.

This week is heavy on Fundamental news both from US and EU and could give us a direction for rest of the month.

Day Ending Update: Took a long at the very low of the day price at 129.97 but got out at BE out of lethargy, carelessness and nervousness. A bad day, took a short half way in between in order to make up for the loss of opportunity in morning. Short was at he descending trendline from above, price broke it shoot up and had to book a loss of 160 pips in total today.

Summary: Read forums and analysis, but dont pay attention to them, hang on to your trade and dont exit early, when opportunity comes, take it dont be lazy. Hold on to you profit. Stick to the plan!! What a day, could have ended it with a 400 pip profit, instead ended it in a 160 pip loss.

Day 10

Bias: Mixed, slightly Bearish.

Looking to sell around 132.70. Its Friday today so I have to be careful and not hurry into anything.

Took a sell higher, failed to book profit and exited back at BE.

Market has been trading in fixed trading ranges because of fast approaching holiday season.

Weekend.

Rules

1. No new market entry between 6PM EST - 8AM CET (6PM - 2AM EST).
2. No posting of trades and bias opinion on Public Internet Forums.
3. Read forums and analysis, but dont pay attention to them, hang on to your trade and dont exit early, when opportunity comes, take it dont be lazy. Hold on to you profit. Stick to the plan!!