Nick Batsford, CEO of Tip TV, was alongside Zak Mir, technical analyst for ShareProphets.com, and Mike Ingram, strategist for BGC Partners, when they opened the Tip TV Finance Show to discuss the future for Gold, prices and consumer confidence, as well as the Bank of Japan and a brief view on a few stocks.
Gold – Will it extend gains above the 100-DMA this time?
Batsford noted FX Street, who outlined that the Gold rally is poised on dropping Fed rate hike bets and the resulting currency wars, as well as global growth slowdown for safe haven demand in Gold and hedge demand amid rising threat of asset price deflation. They continued that Gold could extend gains to USD 1170/Oz and USD 1200/Oz levels in the near-term, however, failure to sustain above 100-DMA could lead to a drop of USD 40-60 from the current price off around USD 1151/Oz. Mir added that the Gold market is realising that neither the US or the UK will be raising rates, and thus the rally expected 5 years ago in gold is possible.
Prices down with consumer confidence slowing
Batsford highlighted Elliott, who commented that in September overall shop prices fell by 1.9% Y/Y, even greater than August’s 1.4% decline. Food prices fell by 0.5% led by fresh food which was down 1.5%, especially meat and fish. Non-food items dropped by 2.9% versus a fall of 2.4% in August. Putting a positive spin on the matter BRP director general Helen Dickinson noted, “While consumer confidence slowed slightly, the fortuitous mix of near flat inflation and falling prices in both food and non-food will help to maintain retailer’s confidence for the foreseeable futures. Ingram added that lower food prices is good deflation, but made it clear that this good deflation doesn’t go on forever.
BoJ policy remains unchanged
Batsford outlined Elliott, who continued that the BoJ left its policy rate unchanged today, disappointing some who had hope for even more easing measure’s in order to stimulate the economy. The BoE and the ECB are also likely to keep matters on hold when the meet on Thursday. Ingram added that people are looking towards the end of October for the BoJ to act now.
Stock Outlook
In terms of Tesco, Mir noted that it is shaping up for the bullish inverted head and shoulders pattern, meaning up to the 250 level is possible after it bounced above 190 today.
Mir commented on Marks and Spencer’s, who he believed to be the best of the supermarkets, and he added that it has a rising 1 year trend channel and the target is £6.
When concerning Copper, Mir outlined that it looks better with a higher low, but wait for the 240 level to break to be more confident in some upside.
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