In a noteworthy surge, spot Gold has once again surged to an unprecedented all-time high, surpassing the $2,354 mark. This latest rally underscores the ongoing positive correlation between Gold and risk assets, which have been witnessing notable uptrends in recent days. Traders inclined towards trend following strategies may find the current market conducive for long positions.
The rally extends beyond Gold, with other precious metals also experiencing gains. Silver, for instance, has surged impressively to a new 2.5-year high, while non-precious metals like Copper are breaking into new long-term highs.
Turning to the Forex market, there’s a notable surge in market bets against the Japanese Yen, marking a 17-year high. This trend suggests a potential retesting of the Yen’s historic lows, despite the looming risk of intervention by the Bank of Japan. The USD/JPY currency pair, hovering near its 34-year low, could see heightened interest among trend traders if a sustained bullish breakout above ¥152 materializes.
Since the Tokyo open today, the New Zealand Dollar has emerged as the strongest major currency, while the Swiss Franc has exhibited relative weakness. This weakness might be attributed to the unexpected Swiss CPI data released last week, which reported no month-on-month change, contrary to expectations of a 0.3% increase.
In the realm of commodities, Crude Oil is currently undergoing a bearish retracement following its recent surge to 5-month highs. Traders are keenly awaiting a series of data releases pertaining to supply and demand throughout the week.
Meanwhile, Cocoa, despite showing short-term bearish retracement, continues to exhibit bullish long-term prospects. The commodity’s value has nearly tripled over the past year, with analysts attributing the meteoric rise to supply shortages and increasing demand. With Cocoa being sought after not only as a key ingredient in chocolate but also as a superfood, trend traders may eye long positions should the price break to new highs. Retail traders and investors also have Cocoa ETNs available as potential investment avenues.
Here’s an example of how we traded gold with 75 Cygni Algorithm a couple of years back when it was still below $2,000 – the same concepts apply now.
And here’s an overview of 77 Cygni Algorithm, showing us an overall trend on a 4-hour timeframe. You can see that we were able to predict this upside trend when gold was still trading in the $2,100 level.
