President Trump's willingness to get around the negotiating table has sparked a risk on rally, with safe havens like Gold, Yen and the Swiss Franc pulling back.
President Trump said he would hold back on new tariffs and China would buy more farm products. He also indicated the US Commerce Department could decide if Huawei should be removed off the list of banned firms and can do so without government approval.
While we know he can change his tune very quickly, it does shift investor's towards crucial US economic data this week (see calendar). This will give cues to whether the Fed will decrease interest rates later this month or not.
Investors who were long gold and gold shares should be banking some of the profits after the recent rally. The weaker gold price and strengthening Rand will see them on the back foot and at the mercy of the risk on rally.
Traders looking for ideas should look at Goldfields, AngloGold and Harmony as potential shorts. You should keep your position appropriate and a stop loss in place.
Below are trading levels for each of them.
1. Goldfields - A weaker open this morning targets R65, and then R60. Short at R72 or higher and place a stop loss at a close above R75.00.
2. AngloGold - A trend reversal is underway and signals weakness towards R215.00 in the near term. Short above R235.00 to target R215.00. Stop loss at a close R240.00.
3. Harmony - Short below R30.00 as it falls back into a trading channel between R22.00 and R30.00. Target R22.50. Place stop loss at a close above R31.00.
On the three ideas above, it's best to trail your stop loss lower as they move in your favour.
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Trade ideas update
We’ve been calling the market well over the last quarter with 7 of our 10 ideas showing profits, we like to trail the stop losses to ride the profitable ideas for as long as it’s going in our favor as possible. See table below for updates.
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The week ahead:
• Local: Business Confidence Index (01/07); HSBC Whole Economy PMI (04/07)
• Results Due: EPS, SNH (05/07)
• LDT (02/07): CTA, FBR, NTC, SCD, SSS
Other Economic data releases of interest…
• Monday: Manufacturing PMI (UK); OPEC Meetings (All); ISM Manufacturing PMI (USA); NZIER Business Confidence (NZL)
• Tuesday: Cash Rate, RBA Rate Statement, RBA Gov Lowe Speaks, Trade Balance (AUS); OPEC-JMMC Meetings (All); FOMC Member Williams Speaks (USA)
• Wednesday: ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI (USA); Services PMI, MPC Member Broadbent Speaks (UK); Trade Balance (CAN); Retail Sales (AUS)
• Friday: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate (USA); Unemployment Rate (CAN)
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