Market Update

General - Gold - Nickel

Good afternoon

just deleted my work…so today´s comment might be a little shorter!

Looks like Australia´s Morrison has done , what seems to be a habit by Australian prmiers: If the US president asks, you follow like a dog….exhibting the difference between an ally and a vasall…The Trump story is getting wilder by the day. The loss of moral, ethics, and the truth under his presedency reaches a new level! What happened to this country,which once was the second best democracy ( behind - probably - England ) and our closest ally???

Manufacturing is looking weak around the world - the US PMI fell to a 10-year low today, weaker than all expectations! Equities had been halfway positive until this number came out - Europe quite weak now, and US Futures have also turned down 100 points in the Dow within minutes…bonds jump, gold jumps…nickel 1% up / copper and zinc down 2%. I wonder, whether tehse numbers will make Trump even harsher in his dealings with China, or whether he will see the need to save the economy? I guess he does not want to go into an election with a recession on his hands…

Gold - after breaking support yesterday, we could well see a test of 1400-1420 US$…that would mark a 50% correction of the recent rise. Still big inflows into gold ETF´s, and ample reason to own gold….from gepolitics, low interest rates to a ballooning US budget deficit ….these things, I fear, will stay with us for a while! Anyway - since the PMI in the US came out, the chart break looks increasingly like a bear-trap , with gold trading at 1484 US$ now and rising!!!!

Nickel - LME stocks have been falling from about 450.000t in 2015 to a low of 144.000t a few eeks ago. Since then, they have been pretty volatile - reaching a high of 167.000t in mid-September, but falling by a very large 5800t today to 152.000t….pretty positive for prices. But Macquarie´s research makes me think today…NPI production in China/Indonesia very strong this year, and NPI prices at a large discount. Obviously, we have the early days of a diverging price for different types of nickel. We need to hope, that high quality stainless steel continues to grow at the expense of low-quality steel, and that EV´s really take off the way many are expecting. The release of the new Porsche EV sports car seems to be a step in the right direction - apparently, an absolutely fantastic car - but expensive! More important will be, how the market accepts the first VW mass market EV!

The A$ is making fresh lows - below 67 against the US - and looking at charts, will at some stage test the low 60ties level. Similar to the Euro - also making fresh, recent lows and now looking to test the old lows around 1.05. This price action would be congruent with gold testing 1400-1420 as well. So at least in terms of the textbook, could well happen!

Have a nice evening