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Trump to appear live on ‘X’ shortly, gold bulls eye a fourth trap

Article By: ,  Market Analyst
August 12, 2024 7:17 PM

It appears Elon Musk has finally convinced Donald Trump to grace his presence ‘X’ for the first time. Yes, Trump has tweeted from the social media platform in the past, but back then it was called Twitter. But the former president has not tweeted from ‘X’ since his famous ‘never surrender’ mug shot in August 2023, and that was his first tweet since his January 2021. Yet on Monday afternoon, Trump announced that he will be interviewed live on ‘X’ by Elon Musk at Monday 20:00 ET.

 

 

Elon has not shied away from his support for Trump, so this interview could certainly shake things up. Trump’s “Truth Social” media platform effectively kept him in a vacuum, and it is clear already from the replies that he has a lot of support on Twitter. And with algos primed for tweets from certain people, volatility could be given a boost in today’s Asian session. On a side note, I would be surprised if Elon extended the invitation to interview Kamala Harris. So this could be viewed as Elon’s latest attempt to swing the election towards Trump.

Whichever side of the highly divisive fence one chooses to sit, traders may want to check this interview out. Trump may have lost his ability to sway markets since Kamala Harris has taken the lead to win, but we all know things can change quickly in the political landscape. And if he can claw his way back into popularity, the Trump trade likely returns. Wall Street indices (particularly the Dow Jones) could benefit if Trump puts in a decent performance. And remember, he earned the name ‘Teflon Trump’ for a reason, so the race to the Whitehouse is not over until its over.

 

 

Gold is on the cusp of reaching a record high after quiet trade allowed to drift higher on Monday. Traders are also seemingly seeking safety ahead of the Musk-Trump interview and key inflation and retail sales reports from the US. Silver and copper were also higher, although from relatively low levels compared to their recent peaks.

AUD/USD remained beneath its 200-day for a second day, but the bias remains for an eventual upside break of it. See my AUD/USD weekly outlook video for a peak at key levels and drivers for the Aussie this week.

Wall Street indices trade in tight ranges in what appears to be the calm before the storm with a busy calendar lined up. Doji’s formed on the S&P 500 and Nasdaq 100 daily chart, although a bearish engulfing day formed on the Dow Jones.

Crude oil prices rose for a second day and gain 2.8% on Monday, on concerns a wider Middle East conflict could restrict supply.

 

 

Events in focus (AEDT):

It is once again difficult to get excited over Japan’s economic data releases, given the BOJ’s switch back to dovish mode and an ex-BOJ member saying he doubts the central bank will hike rates again this year.

 

Australia’s quarterly wage price report warrants a look in case it unexpectedly turns higher, even though it tends not to be a market mover. Because if a hot print is combined with yet more robust jobs figures on Thursday, hawkish comments from Bullock could carry more weight when she speaks to the House of Reps on Friday.

 

UK earnings and employment data could set the stage for inflation data released on Thursday (and therefore BOE expectations).

 

US producer prices could garner more interest than usual as it is on the even of CPI data. Fed doves will be seeking a soft set of figures, which could see them front-run the CPI data should it come in soft to weaken US yields and the US dollar.

 

  • 09:50 – JP producer prices
  • 10:00 – SG final Q2 GDP
  • 10:30 – AU consumer sentiment (Westpac)
  • 11:30 – AU quarterly wage price index (ABS), business confidence (NAB)
  • 16:00 – JP machine tool orders
  • 16:00 – UK earnings, employment
  • 10:30 – US PPI

 

 

 

Gold technical analysis:

The rise of gold on Monday has caught me a little by surprise, and I thought $2500 would put up a bit more of a fight as resistance than it did. But with gold now so close to its record high, I find it difficult to not see the market wanting to test a new high today. I think the bigger question is whether it could hold on to any gains if it did. And I doubt it will for now.

 

The May, April and July highs sit between $2519 and $2536, and we’ve seen the market reverse each time a new marginal high was reached. I suspect bulls could be in for a fourth trap.

 

Still, the 1-hour chart shows a strong impulsive move from $2420 with little in the way of any pullbacks. This is a testament to its strength and likely favours a move to a new record high. Dips towards $2500 could be appealing to bulls eager to rush in at my anticipated highs for a ‘last hurrah’. If we do see a new high, I will then look for evidence of a momentum shift to signal a decent pullback.

 

 

View the full economic calendar

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

 

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