Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Palladium Surges above $2,400. Is It Sustainable? - 27th Jan 20
THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting… - 27th Jan 20
Stock Market, Gold Black Swan Event Begins - 27th Jan 20
This Will Signal A Massive Gold Stocks Rally - 27th Jan 20
US Presidential Cycle Stock Market Trend Forecast 2020 - 27th Jan 20
Stock Market Correction Review - 26th Jan 20
The Wuhan Wipeout – Could It Happen? - 26th Jan 20
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Forex, Oil and Gold Market Forecasts for 2014

Stock-Markets / Financial Markets 2014 Jan 01, 2014 - 02:58 PM GMT

By: Submissions

Stock-Markets

David Parker writes:

EUR/USD
The EURUSD started 2013 just above its major resistance at 1.3000 and managed to climb up to 1.3790 by the end of January 2013, as the Fed decided to increase its monthly asset purchases from $40 billion to $85 billion.  At the end of the first quarter, the banking crisis expanded across the European countries and the single currency tumbled down to 1.2740, which was the yearly low for the pair. For a few months, the pair swung between gains and losses and at the beginning of July hit a double bottom at 1.2740, as Ben Bernanke announced a trim to the asset purchases during September.


Despite the Fed’s announcement regarding the QE program, the US economy struggled to find a recovery plan and the pair rebounded back to gains paving the way towards higher highs. In addition, the US shutdown during October helped the euro to appreciate touching its highest level since November 2011 at 1.3838. The year ends with Fed tapering its asset purchases by 10 billion and projecting that during 2014 we may see the pair dropping down, as the US economy may find a recovery path and the European leaders continue to struggle to find the formula to bring Europe back to steady growth. 

USD/JPY
Shinzo Abe was elected as the prime minister of Japan on 26 December 2012 and the Bank of Japan took proactive steps to control deflation in Japan. Towards the end of March, Abe appointed Haruhiko Kuroda as the new Governor of the Bank of Japan. Few weeks later, Haruhiko Kuroda announced that the BoJ would be purchasing securities and bonds in order to double Japan’s money supply in two years. The result of those actions was the depreciation of the Japanese yen. The USDJPY started the year just below the level of 86.00 and skyrocketed up to 103.72 until May 2013. On the other side of the Atlantic, the troubles within the US economy helped the Japanese yen to pare part of previous month losses and the pair dropped back to 93.75 by June 2013. The pair fluctuated for a while and after the resolution of the US shutdown and the approval of the US budget during October, the pair continued its rally towards higher highs. By the middle of December 2013, the USDJPY managed to rise up to 104.60 and recorded new highs since October 2008. The pair may continue the bullish trend during 2014, as the BoJ is expected to continue the monetary easing and on the other side the Fed might scale back its asset purchases by the end of 2014. Projections indicate a new high for the pair and we may see it climbing up by the end of 2014.

WTI Oil
2013 has been an eventful year for energy prices with the two global oil benchmarks narrowing their spread in the late summer. West Texas Intermediate (OIL), the US benchmark, started the year trading at 92.00 dollars per barrel and followed a bullish rally until 112.20 in August. Most pressure was created from a supply glut in Oklahoma US with the pipeline infrastructure unable to process the required amounts to satisfy demand. New pipeline infrastructure deliveries since have helped ease supply considerations and at the same time, the US commitment to reduce reliance on foreign oil have helped it increase its own energy resources including shale gas and more reliance on neighbouring Canada’s tar sands. These developments will greatly reduce any future supply considerations looking into 2014. On the demand side, a healthier US economy may drive consumption of energy higher as unemployment stabilises lower and industrial production picks up. The recent decision by the Fed to taper quantitative easing by USD 10 billion per month during 2014 may have an effect on commodities and other asset classes altogether, however the initial reaction by markets pushed the US benchmark above 98.50 dollars.

Brent Crude
Brent Crude (BRT) rose to 119.00 dollars by February 2013 falling below 97.00 in April and finding again strong resistance at the 117.00 dollar range. While global demand remained relatively subdued, with sluggish growth in Europe and a slight suppression of growth rates from Asia, 2014 is expected to be a better year for the global economy, especially as key European industrial countries are slowly leaving the crisis and consumption in these countries starts to pick up. In the next year China is expected to surpass the US as the world’s largest oil consumer which could further put some demand pressure on the global benchmark. Two major events affected supply in 2013 including the death of Venezuela’s socialist President Hugo Chavez, and the election of a new Iranian President, Hassan Rouhani. Iran and Venezuela are two of the world’s seven largest oil producing nations and development in these countries during 2014 will have strong supply implications in the world’s oil prices. As the new Iran regime looks more ready to cooperate with western powers we may have an easing of supply during the year, leading to downward pressure in the price of Brent.

Gold
Gold (XAU) has had one of the worst years in its history after falling more than 500 dollars from last January. The precious metal has been on the decline since late 2012 as the American economy started growing. While for the most part of 2013, investors were expecting a statement from the Fed that would put an end to QE 3; this did not come until the end of December. As the US money supply is expected to grow at a smaller rate over the next year, with 10 billion less added liquidity per month, the dollar may appreciate, pushing asset prices lower especially on commodities like gold which are not income generating.

On the supply side, no major disruptions in mining are anticipated and even though extraction costs have grown over the past few years, these seem to have been pulled higher due to the higher price of the commodity on the open market rather than fundamental cost increases. As we enter the new year, the 1000 dollar mark will be a key psychological level for the support of gold and from then on it will again mostly depend on the dollars money supply or an external “black swan” event that may increase risk aversion in the markets.

Author: David Parker

Short bio: Marketing consultant and entrepreneurial investor.
Website: www.easy-forex.com

© 2013 Copyright  David Parker - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules