Gold Fundamental Analysis August 17, 2012, Forecast

Posted August 16, 2012 17:16 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Analysis and Recommendations:

Gold is trading at 1616.05. Most of the trading day was fairly quiet as predicted with little eco news in Europe and little political drama. Gold was trading fairly flat until the US eco releases dashed hopes generated earlier this week. With the exception of building permits which reported higher then expected, unemployment, housing starts and manufacturing all reported well below forecast, once again turning investors to think of Fed stimulus.

Taking cues from yesterday’s upbeat Industrial production numbers from the U.S and optimistic comments by the Chinese premier Wen Jiabo, most of the commodities in traded initially with a mild positive bias but was seen reversing earlier gains on a weak Chinese FDI data. Spot gold and silver were seen marginally up, trading in narrow ranges. Taking sheen off gold today was the report by the World Gold Council which showed Gold imports by India, the world’s largest bullion buyer, falling 56 percent in the second quarter after record prices curtailed jewelry buyers and investors.

Gold demand fell to its lowest level in more than two years in the second quarter, the World Gold Council said, as drop in buying in major consumers India and China outweighed a record quarter for central bank purchases. Overall gold consumption fell 7% to 990 tonnes in the three months to June, its lowest quarterly level since the first three months of 2010.

Dollar index edged up, trading on a greener turf on U.S recovery sign optimism. Base Metal complex in LME was almost flat with Lead and Zinc falling more than 1 percent.

Earlier, Chinese foreign direct investment fell 8.7% in July to the weakest level in almost 2 years, suggesting weakening foreign confidence in the country’s economic prospects.

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 16, 2012 actual v. forecast

Date

Currency

Event

Actual

Forecast

Previous

Aug. 16

KRW

South Korean Unemployment Rate

3.1%

3.3%

3.2%

GBP

Retail Sales (MoM)

0.3%

-0.1%

0.8%

GBP

Retail Sales (YoY)

2.8%

1.4%

2.6%

EUR

CPI (YoY)

2.4%

2.4%

EUR

Core CPI (YoY)

1.7%

1.9%

1.6%

USD

Building Permits

0.812M

0.770M

0.760M

CAD

Foreign Securities Purchases

-7.89B

10.67B

26.11B

USD

Housing Starts

0.746M

0.757M

0.754M

CAD

Manufacturing Sales (MoM)

-0.40%

0.40%

-0.40%

USD

Initial Jobless Claims

366K

365K

364K

USD

Continuing Jobless Claims

3305K

3300K

3336K

USD

Philadelphia Fed Manufacturing Index

-7.1

-5.0

-12.9

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

Date	Time	Currency	Event	Forecast	Previous
Aug 17	6:00	EUR	German PPI m/m	0.4%	-0.4%
	8:00	EUR	Current Account	7.8B	10.9B
	13:55	USD	Prelim UoM Consumer Sentiment	72.5	72.3

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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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