Holiday Weekend Preview: Gold And Cryptocurrencies
Next week is one of the least traded weeks of the year. Most liquidity providers take the week off or balance the end-of-year books.
With only a few hours to go, we are near the close of another forex trading week. It has been an active five days on the news front. U.S. tax reform became a reality and Bitcoin underwent its largest correction ever. For a holiday week, the financial world was active.
The economic calendar is bare for the remainder of the day. The only release that may skew markets is the U.S. CFTC net gold positions report at 3:30 PM EST. If you are holding a late-day gold position, it will be a good idea to watch volatility around the report.
Markets will be closed December 24 and 25 in observance of the Christmas holiday. They will reopen Monday afternoon for the Tuesday session.
Next week is one of the least traded weeks of the year. Most liquidity providers take the week off or spend it balancing the end-of-year books. Expect muted trade and limited participation, but be ready for anything!
Safe-Havens
It is not uncommon for institutional and high net worth investors to take positions in traditional safe havens before an extended market holiday. We are seeing this phenomenon illustrated in today’s gold futures market.
As of this writing, February gold futures are up over 80 ticks having posted an intraday high of 1280.4. This is largely due to hedging against the coming break and paranoia from the dramatic sell-off in Bitcoin.
Cryptocurrency Brief
My colleagues have covered today’s cryptocurrency sell-off in depth over the course of the trading session. Several signals have come into play with volatility being the name of the game. As of this writing, there is still serious action on the cryptocurrency front.
All crypto markets have struggled, including futures and CFD products. The last 24 hours on the cash market have been a bloodbath for bulls:
Product 24 Hour Performance
Bitcoin -13.5%
Bitcoin Cash -16.2%
Ethereum -17.3%
Litecoin -16%
Earlier, cryptocurrencies were in even worse shape. The rebound of the past three hours has saved considerable market value. We will see if it holds through the weekend.
Enjoy The Break!
Pursuing success in the marketplace can be an exhausting endeavour. The digital age has enabled the forex, futures, and CFD markets to remain open nearly 24/7, 52 weeks a year. It is crucial to take a break from time to time. This weekend is a good opportunity to do just that.
Burnout and trader fatigue are very real contributors to eventual failure. And, as you all know, failure in the markets results in the loss of money. So, take a few days off and recharge the battery. The Tuesday open will be here before you know it!
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