How The OPEC Deal Impacts The FX Arena

Lior Alkalay - Contributor - Forex

The much-anticipated OPEC deal to cut oil production has finally been reached. Brent and WTI Oil futures were not too late to react and jumped more than 7% with Brent Oil futures surpassing the $50 mark. And if momentum continues we could very well be looking at $60, perhaps rather soon. If that is the case, this can change the picture, not only for Oil futures and Oil companies but for currencies of Oil exporting countries, many of which were hit hard when Oil prices took a nose dive and could benefit now that oil prices are taking off.

The question is how exactly would an Oil rally play in petro-currencies in the current macro environment? Is it a good opportunity to buy into the battered Ruble? Or maybe a Norwegian Krona rally against the Euro? The options are numerous, but once we delve into the economic dynamics of each currency, the options narrow fast. Continue reading "How The OPEC Deal Impacts The FX Arena"

Gold And Oil Breakout: We Can Benefit!

Aibek Burabayev - Contributor - Metals

In my earlier posts I showed you how gold and crude oil broke out of their trends. Gold moved higher amid an oil break down. The simplest trade here is the purchase of gold on the dip and the sale of oil on pullbacks. Today I want to share with you some other options. We can use oil related currencies instead of oil as they tend to lag and overreact to oil moves.

Chart 1. Gold Vs. Russian Ruble Weekly: Say Hi To A New High!

Gold Vs. Russian Ruble Weekly Chart
Chart courtesy of

The currency of the world largest country stopped strengthening only last Friday despite that oil reversed much earlier. I call this an overreaction of the currency to the oil move. I guess it’s all about the mechanical reaction of retail USDRUB sellers to the ruble and oil strength which was gone long before they started to act. Usually, non-professional players tend to sell bottoms and buy tops on market panic. Another good thing in this market is that while the ruble was strengthening gold pulled back down, giving potential buyers extra bonuses (falling gold + overreacting ruble).

The Gold/RUB pair has been in an uptrend for 2 years. At the start of 2016 the market it broke out of the triangle above the RUB 78K level and then rapidly moved higher. It topped beyond 2015 high at RUB 101,858 level in February. Continue reading "Gold And Oil Breakout: We Can Benefit!"

"Winter Is Coming"… Hungry For Gold

Aibek Burabayev - Contributor - Metals

Behind The Wall

I dedicated my last post to China which is diversifying foreign reserves with large Gold purchases. This time, I want to share my thoughts about a reviving empire and the northern neighbor of China.

The Eurasian Economic Union (EEU) is the largest union on Earth by territory. It is so vast that on one side of it people try to survive in Arctic frost and on the opposite side one can enjoy a mild winter full of sunny days skiing in the high Kyrgyz mountains. The union ranks fifth by GDP (PPP) and seventh by population and it’s only the beginning. The member states are (in alphabetical order): Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. Continue reading ""Winter Is Coming"… Hungry For Gold"