Daily Analysis - 15/10/2019
In the Middle East, alliances and relationships shift like the desert sands. While the Kurds are lauded for their invaluable assistance to the cause of irradiating ISIS, Turkey is a staunch US ally and NATO member in good standing. It is less than surprising that the US has dealt a blow to its erstwhile ally the Kurdish army. It did similarly after a long and bloody war, to Vietnam and Lebanon. As the saying goes, there are no permanent allies only permanent interests.
Today’s EURTRY stands at 6.51264 and is continuing its steady rise. This weakening represents the market view that the damage to the currency will be high due to the uncertainties of the current military use of force as well as the underlying weaknesses in the Turkish economy that will have to bear the burden of financing the undertaking.
The current round of discussions between the US and China may possibly bring an end to the relentless escalation of tariff increases between the trading giants. Understand that the euphoria, as it is, is based on the possibility that the tariff will not be raised further. There is no talk of reducing anything, just not increasing. Source of positive vibes, perhaps, but hardly reason for euphoria. Until and unless we hear the magic words that China will stop demanding the turnover of intellectual property from any and all parties establishing enterprises in China, then there will be no reason for jubilation.
Despite some of the highest volumes in the gold market for a quarter of a year, traders have been unable to move the gold price much beyond 1500. And when they have, they cannot sustain that level for very long. It is hard to discern the true impact of the shiny metal nor for that matter what actually drives its movements. Regardless, the lack of movement in the face of growing tensions around the globe both geopolitically and militarily are difficult to reconcile with the traditional view of gold as “safe haven”. Currently Gold is moving in a narrow channel and it’s at the low end of the channel at present.
