Gravy Train Continues – Gov Shutdown Averted

US Congress approved an extension to funding yesterday, narrowly avoiding a Government shutdown due to begin this Saturday. Congress is set to approve funding for an additional 1.66T that would fund the Government through to March/April this year.

With the US starting to make this a regular occurrence, markets reacted positively reversing 5 days of weak sharemarket results. Gold also reacted positively, reversing its downwards trend through the week, to bounce back to US$2023 after hitting a low of US$2002 late Wednesday.

Rate cut predictions have also started to roll through, with expectations for the first cut in September. This is a far cry from the message sold to consumers late last year. With CPI and Retail Sales a little hotter than expected over Christmas, we’d guess that this feels about right. Australian’s could well see a rate cut earlier, especially as our markets seem to be a little slower to recover. It is very important to keep in mind, that whoever cuts rates first will weaken their currency. With the AUD already quite low, the RBA may be hesitant to weaken it further.

And take a peak at Gold’s charting – it is following a beautiful pattern presently, especially following its most recent ‘higher low’.

Enjoy today’s charts and forecast. 

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA

Gold Futures Technical Analysis

Gold futures monthly analysis continues to recommend a STRONG BUY with weekly analysis a BUY signal.

Technical indicators – Monthly Projections

 Summary for Monthly forecast: STRONG BUY

*Not financial advice, please DYOR prior to any investment decisions you make.