Are We on the Brink of a Risk-Off Event?

The tinder is dry, and it won’t take much to get the fire started.

I took some profits and raised cash levels in my trading service Retirement Trader yesterday, because I think the stage is set for a risk-off event.

While Charlie and I recorded Closing Bell today, gold fell by over US$350.

You don’t see that every day!

The volatility we are witnessing in precious metals and even base metals is extraordinary.

Copper jumped from US$6.00/lb to nearly US$6.60/lb yesterday afternoon and is now trading back at US$5.93/lb.

Bitcoin is testing the low of the past four months. A failure below US$80,000 could spark a rapid fall.

The US Dollar Index [TVC:DXY] has been battered over the past few weeks and is testing the bottom of its four-year range.

Further falls could ignite some serious selling pressure. Things are looking tense.

Conversely, the Aussie dollar has broken out of its range and looks set to rally towards US$0.7500–0.7800 over the next year.

Rumours are spreading that Kevin Warsh will be the next US Fed Chairman. Perhaps the sharp moves we’re seeing in markets are a result of those rumours.

A quick look at his background, and it appears he does think interest rates should be lower, but you wouldn’t class him as a massive dove.

He also thinks the Fed’s balance sheet should continue to shrink. Apparently, he was quite hawkish until recently. Trump is making an announcement on Friday morning in the US.

It isn’t just the new Fed Chairman who can get markets moving.

I still think moves in the USDJPY are worth keeping an eye on, as well as gyrations in Japanese bonds.

If the US dollar continues to nosedive, it could spark large capital outflows. Repatriation of money back to Japan, as well as unwinding of carry trades, is on the menu.

Something like that could see a sharp correction in US stocks and bonds.

US charts aren’t saying it’s time to jump ship yet.

It’s just important to be aware of the rising tension within markets as currencies start to fly around.

That’s why we kick off today’s episode looking at the recent moves in the USD Index, USDJPY, and AUDUSD.

We then follow up with an analysis of some of the fast-moving commodities.

Regular viewers should recall that two weeks ago I said uranium looked ready to blast off after breaking out above US$82.50/lb. My first target was US$100/lb.

Today, spot uranium sits at US$101.50/lb.

We also look at the crazy moves in silver, but remember it’s moving so fast that it will probably sound like old news soon.

Oil also gets a look in as Trump moves military assets towards Iran and makes demands the Mullahs can’t accept. Copper is a tough one to decipher with the geopolitical overlay.

We hope you enjoy today’s instalment of Closing Bell and don’t forget to give us a like if you have been making some dosh from the calls we’ve made.