The BoE is one of the trickier meetings to cover due to the high risk of stagflation in the UK. We also need to bear the mini-budget in the UK on Friday. Spoiler: It is not going to be 'mini' as Liz Truss is trying to adopt pro-growth strategies to boost the UK's ailing economy. 

Key inflation risk will be with the US Core PCE print tomorrow. If that comes in below market's minimum expectations at 5.1% or lower then peak inflation calls will intenisfy. Ideally a print sub 4.9% shoudl lift silver and gold.

Inflation data out on Wednesday (June 22) will be key for setting expectations for the size of the next BoE hike

One key risk with this outlook is that the NZD was very weak at the end of 2021 despite the very hawkish pivot by the RBNZ at the time. Now, the NZD eventually made up some good gains. However, be sure to limit risk and leverage is proabbly best avoided to keep sound risk management front and centre. 

The Canadian CPI print came in hot today with the Core inflation rate at 5.7% y/y above the maximum expectations of a 5.6% print. This is not ideal for AUDCAD longs. 

However, AUD labour data  is due out overnight and a strong print there in the headline and low unemployment could still lift the AUDCAD pair. 

If it misses then the AUDCAD upside bias is far less clear...

I know - patience, patience....😀

Hi Michelle, 

Thanks for responding. 

The key to understanding gold's price is to first of all see how bond yields, inflation and the USD impact prices. Then, once the fundamentals are in place, you start looking at the technicals to manage risk. 

So, it's not really a case of a trendlibe 'working' or not, but more a case of what's the fundamental cae and then how can I use technicals to manage that risk. 

Does that make sense?

The main risk to this outlook is a heavy slowdown in China's economy. That woudl be a tailwind for AUD gains. 

The flows into stocks tend to be highest in the winter months and tail off in the summer ones. So, historically speaking, there is less inflows into equity markets around the summer months. The current huge amounts of stimulus from Govt's and low rates from central banks have been boosting equity prices even over the recent summer months. Key meeting tomorrow with the Fed.

Yes, the 'too big to fail' mantra of the 2008/2009 crisis has now become the 'too many to fail'. If we get the shutdown dragging on for more than 2/3 months then we will have a fresh wave of panic. However, I would imagine that it will just result in more helicopter money being gifted. The worst case scenario is that we limp along for a year until we get a vaccine.