Abigale the feds decision is really the
key driver of markets today oh you're
absolutely right about that Romain we do
have a risk asset rally on our hands if
we take a look at the influence on the
futures market we're gonna see that it's
all about the weak dollar that of course
on the Fed surprising dovish notes are
at least the way the markets are taking
you right now take a look at the S&P 500
emini Zep six tenths of 1% off the highs
but nonetheless up for a fourth day in a
row crude oil up five point four percent
surging another risk asset less liquid
this tells you investors are really
leaning toward risk the best day of the
year and gold futures up 3.3% the best
day since June 26 of 2016 or 24th of
2016 I should say when we had that big
brexit sell-off investors seeking a
haven then right now they are seeking
potentially a hedge against inflation
if the dove or the Fed does go even more
dovish than expected now all of this of
course you can see Wang on that dollar
and we are potentially seeing an
interesting shift for this chart now
right now support is holding we do have
some surprising strength it's a two-year
chart of the dollar index we see an
uptrend the dollar index holding that
200-day moving average over the last
year this range of volatility right now
testing down onto that 200 moving
average breaking out of a range it's
holding on but it does appear to be on
the cusp of a breakdown if it does break
down you could see it go anywhere 294 92
maybe even 90 that would potentially
drive gold and the other commodities and
risk assets higher to talk more about
this I'd like to bring in John rope a
wolf research so great to have you here
John and what do you think of that
dollar chart do you think that the
dollar can hold in or do you think we're
gonna see a breakdown we think the
dollars gonna weaken okay we monitor
about 30 currency pairs and 26 of 30 are
weakening so the dollar is weakening
sort of across the board so that it's
gonna break so one great way to play
that of course would be gold futures and
you have a chart and I just wanted to
give you a little bit of applause here
because you sent this charge me
yesterday before that breakout even a
blind squirrel finds a note once in a
while so what we like the breakout here
and we realize it's run a lot and on a
near term basis it probably is
overbought but we would use any pullback
to the breakout level to buy and we
think on the futures the August contract
of 1451 is a pretty decent target okay
so that's where you would be looking to
go long on those August gold futures and
then now let's take another look at a
long-term chart a gold spot and that
really is an impressive range to
possibly produce a huge breakout yeah so
we actually like this one a lot better
we think it's
the bigger story okay so just to give an
idea so this has gone sideways for six
years from the spring of 2013 and it's
right up into the top of the range which
is roughly 1,400 we think it breaks out
we think this is a big base and we think
upon the breakout Gold's gonna have
enough get enough gas in the tank sorry
for the mixed metaphor to make a new
all-time high so we we really are we
really are very positive on this set up
here for gold where big bases are sort
of our raison d'être and this one has
really set up to do something very
powerful okay so you think that gold is
gonna make a new nominal high and I know
that technicians typically don't talk
about the what but let's bring that in
just a little bit does this suggest
because that huge move higher out of the
financial crisis of course that was
driven by the feds accommodative policy
do you think that this base breaking out
to the upside is a sign of it or do you
think it's more similar to what we saw
at the end of the 90s I'm gonna beg off
your question only because I think the
narrative will follow right ice moves
first is Paul Tudor Jones told thanks
price moves first and then the narrative
follows it could be that all interest
rates are going to be either nearer to
zero or negative as we're seeing in for
many central banks or it could be a
weakening dollar it's it's immaterial to
me why it gets there but the set up is
very important and we've done some long
term work for this relative to the DXY
which is the dollar spot index and is
that weakens it's very it's a very
important input for this to work higher