Gold Fundamental Analysis August 10, 2012, Forecast

Posted August 09, 2012 17:43 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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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