The coming week promises to be "hot", two packages of sanctions and tariffs are expected to be sent to Russia (sanctions) and China (tariffs) correspondingly. But let's talk about this in the analytics of the prospects for gold and oil for the upcoming week.
The business activity of the EU and the protocols on the monetary policy of the last ECB and FRS meetings will be the most volatile for the main pair on this five-day week as for economic news. The market does not wait fundamentally new from the protocols, the clearly expressed position of the Fed is clear to everyone, as well as the pigeon rhetoric of the ECB. These protocols will only serve as confirmation of the announced plans of both regulators and inspire confidence in the correctness of purchases/sales in pairs.
Significant news in the economic calendar will begin to come out on Wednesday and the US will turn its attention to itself. The secondary housing market will tell us about sales in July, and later in the evening, the Fed will publish a protocol from the last meeting (as discussed above). On Thursday, the EU will report on business activity in the manufacturing and services sectors, after which the ECB will publish its protocol on monetary policy from the last meeting. The US will unveil the same indicators and sales of new housing in July.
By the end of the week, the first economy of the Eurozone will publish GDP for the second quarter, the final estimate. And a symposium of central banks, where the heads of the Central Bank will discuss monetary policy will be held in Jackson Hole (USA). Also, the States will publish basic orders for durable goods.
Generally, there are practically no reasons to change the trend at the moment, therefore, the global bearish movement is a priority.
Now let's talk about from what will be "hot" this week? The reason is the escalation of geopolitical tensions in the world. Tomorrow the Chinese delegation should come to Washington to settle the trade conflict, well, an attempt to agree rather than settlement. After all, China will not be able to respond with mirror tariffs to the United States for a long time, simply because the United States does not supply so many goods to the People's Republic of China. What will be agreed and agreed at all? That's the question. It is noteworthy that a public hearing regarding a new package of tariffs for Chinese goods will be held on the 23rd of August in the US. Therefore, if China can not agree, or rather yield, recognizing defeat to America, new tariffs will come into force.
Also a new package of sanctions against the Russian Federation, due to poisoning in Great Britain will come into force this week. This is the most severe sanctions that have ever been issued. The ban on operations with public debt is no longer a joke. Naturally, transactions with securities that are traded in the US dollar and only newly issued are prohibited as well. Russia no longer holds auctions in US currency.
As we can see, geopolitical risks with a strong US economy make us closely monitor the price of gold. It is quite possible that a powerful signal to buy will soon arrive. Further escalation of stresses will only contribute to this.
Last week ended on a bullish note, due to a message from Baker Hughes that the number of drilling rigs remained unchanged. Although, on the other hand, it has not decreased - it's not bad at all. And this amount was enough to substantially replenish the reserves, as evidenced by the data last Wednesday.
As we said in the "GOLD" review, trade frictions between the US and China raise doubts about the continued demand in the market. Some large companies with production in China are already talking about moving from 40% to 60% of production back to the US. As it becomes expensive to manufacture in China and sell products in the US. Perhaps this is what President Donald Trump is trying to achieve?
Traditionally, we observe the number of stocks of crude oil and its products in the US on Wednesday. We also monitor the further actions of the United States and the PRC, that must begin negotiations tomorrow. If China goes to the meeting, the demand will continue, if negotiations fail, the demand for oil will fall, as well as the price.
Let's also recall the cryptocurrency, which begins to return attention to itself. For example, Iranians have already significantly increased the number of operations for the purchase of crypto assets before the introduction of US sanctions in October. The escalation of trade tensions in the world under the auspices of the "US against all" is also facilitated by the investors` leaving, let's say, into other assets from currency pairs and goods, where there is too much uncertainty at the moment.
Moreover, new positive signals appear on the market of cryptocurrencies. So last Friday, trading in exchange notes for bitcoins which are tied to the US dollar was launched at the Stockholm stock exchange NASDAQ. Also in September, US investors are waiting for bitcoin-ETF, whose launch consideration was postponed since August, which served as a collapse for more than a thousand dollars. ETF is an index fund, as shares (stocks), so it can be traded as a normal share of a company.
Recognition of the cryptocurrency as an asset by the world trade exchanges is an extremely positive signal for the young digital market.