Gold Fundamental Analysis August 10, 2012, Forecast

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Analysis and Recommendations:

Gold is trading at 1616.35 showing small gains following a weak Chinese inflation data which left room for further monetary easing. The Chinese consumer price index rose 1.8% in July from  the year-ago period,  marginal increase than  the forecast, but  slowing from the  2.2%  increase  seen in June. Chinese industrial output too drifted lower to 9.2 percent from a forecast of 9.8 percent.

If this makes any sense to you, good luck, as today was a day of confusing messages, as early Chinese data was more positive then the releases later in the afternoon. Retail sales plummeted in July along with Industrial Production and Fixed Asset investments.

In the US continuing unemployment claims climbed higher then forecast but new claims declined. While the UK trade balance disappointed and the US came in better than forecast while Canadian trade was off also.

Meanwhile, gold traders remained on the sidelines due to hopes of possible economic stimulus in Europe and US. Quantitative easing from various central banks will boost gold’s demand as it lifts inflation outlook and prompt investors to turn to gold due to its hedging appeal against rising prices. The US dollar was pushed higher from its one month low after the government data showed US productivity rose 1.6 percent in the second quarter.

However, the Euro retained its previous gains and held steady.  Physical activities on gold remain dampened from Asian countries due to a respite in season while the gold exports from Hong Kong to China fell for the second month in June. In the mean time, US jobless claims scheduled to release later today and monthly budget statement tomorrow are the other key data investors looking ahead.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 9, 2012 actual v. forecast

Aug. 09

02:30

 

AUD

 

 

 

Employment Change 

14.0K

 

10.0K 

 

-28.3K 

   

 

02:30

 

AUD

 

 

 

Unemployment Rate 

5.2%

 

5.3% 

 

5.3% 

   

 

02:30

 

CNY

 

 

 

Chinese CPI (YoY) 

1.8%

 

1.7% 

 

2.2% 

 

 

 

02:30

 

CNY

 

 

 

Chinese PPI (YoY) 

-2.9%

 

-2.5% 

 

-2.1% 

 

 

 

02:30

 

CNY

 

 

 

Chinese CPI (MoM) 

0.1%

 

-0.1% 

 

-0.6% 

 

 

 

05:00

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.4%

 

20.5% 

 

20.4% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

9.2%

 

9.8% 

 

9.5% 

 

 

 

06:30

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

13.1%

 

13.7% 

 

13.7% 

 

 

 

09:30

 

GBP

 

 

 

Trade Balance 

-10.1B

 

-8.6B 

 

-8.4B 

 

 

 

13:15

 

CAD

 

 

 

Housing Starts 

208.5K

 

213.0K 

 

222.1K 

   

 

13:30

 

CAD

 

 

 

Trade Balance 

-1.8B

 

-1.0B 

 

-0.9B 

   

 

13:30

 

USD

 

 

 

Trade Balance 

-42.9B

 

-47.5B 

 

-48.0B 

   

 

13:30

 

USD

 

 

 

Initial Jobless Claims 

361K

 

370K 

 

367K 

   

 

13:30

 

USD

 

 

 

Continuing Jobless Claims 

3332K

 

3280K 

 

3279K 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Previous

Aug 10

6:45

EUR

French Industrial Production m/m

-1.9%

 

8:30

GBP

PPI Input m/m

-2.2%

 

12:30

USD

Import Prices m/m

-2.7%

 

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date  Time  Country 

Aug 10  10:00  Belgium

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

Aug 14  09:10  Greece 

Aug 14  09:10  Italy

Aug 14  09:30  Belgium

Aug 14  14:30  UK

Aug 15  09:10  Sweden

Aug 16  09:30  UK

Aug 16  15:00  US 

 

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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