Gold Fundamental Analysis August 24, 2012, Forecast

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Analysis and Recommendations:

Gold added 25 dollars in today’s session to trade at 1663.45. Gold put a strong performance yesterday, shot up above $1660 an ounce, the first time since early May. Euro lifted to a seven week high while dollar hit a two month low against a basket of currencies after the latest US FOMC meeting minutes raised concerns of a fresh monetary easing. 

Policy members in the US FOMC meeting said additional stimulus measures would be required soon if the economy is not showing signs of hard-wearing recovery. Economic stimulus from central banks probably raises inflation outlook which could benefit gold due to its inflation hedge appeal. Possibilities of more monetary easing form central banks attracted more speculators into the counter. However, holdings of SPDR, the world’s top gold backed exchange traded fund, continued to rise testing a three month high yesterday.

Physical buying is slightly picking up from India after reports of good monsoon that attracted more rural buyers and demand owing to upcoming marriage season regardless of record domestic prices. Meanwhile, investors will closely watch the result of Greek Prime Minister and European leaders’ meeting later this week and also the outcome of central bank symposium in Jackson Hole at the end of this month for more clues on bullion direction.

Precious metals continue to rise supported by a stronger Euro. The yellow metal rose to its highest since early May while spot silver outran gold, gaining more than two per cent. Platinum too continue to put up a good show.

Chinese manufacturing data kept gains under check in the base metal segment. LME copper shot up to a one month high gaining more than one per cent. However, aluminum was the best performer, rising more than one per cent. MCX base metals moved in tandem with the international market. The Chinese HSBC flash manufacturing PMI slipped to a nine month low.

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 23, 2012 actual v. forecast

Aug. 23

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

 

 

49.30 

 

 

EUR

 

 

 

German GDP (QoQ) 

0.3%

 

0.3%

 

0.3% 

 

 

EUR

 

 

 

German GDP (YoY) 

0.5%

 

0.5%

 

0.5% 

 

 

EUR

 

 

 

French Manufacturing PMI 

46.2

 

43.6

 

43.4 

 

 

EUR

 

 

 

German Manufacturing PMI 

45.1

 

43.4

 

43.0 

 

 

SEK

 

 

 

Swedish Unemployment Rate 

7.00%

 

7.20%

 

8.80% 

 

 

EUR

 

 

 

Manufacturing PMI 

45.3

 

44.2

 

44.0 

 

 

NOK

 

 

 

Norwegian GDP (QoQ) 

1.2%

 

1.0%

 

1.5% 

 

 

GBP

 

 

 

BBA Mortgage Approvals 

28.4K

 

28.2K

 

25.9K 

 

 

GBP

 

 

 

CBI Distributive Trades Survey 

-3

 

15

 

11 

 

 

USD

 

 

 

Initial Jobless Claims 

372K

 

365K

 

368K 

 

 

USD

 

 

 

Continuing Jobless Claims 

3317K

 

3300K

 

3313K 

 

 

USD

 

 

 

New Home Sales 

 

 

365K

 

350K 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and North American markets

Aug. 24

08:00

 

HUF

 

 

Hungarian Retail Sales (YoY) 

 

 

-2.40% 

 

-2.50% 

 

09:30

 

GBP

 

 

Business Investment (QoQ) 

 

 

2.8% 

 

1.9% 

 

09:30

 

GBP

 

 

GDP (QoQ) 

 

 

-0.5% 

 

-0.7% 

 

09:30

 

GBP

 

 

GDP (YoY) 

 

 

-0.6% 

 

-0.8% 

 

13:30

 

USD

 

 

Core Durable Goods Orders (MoM) 

 

 

0.5% 

 

-1.4% 

 

13:30

 

USD

 

 

Durable Goods Orders (MoM) 

 

 

2.4% 

 

1.3% 

Government Bond Auctions

Date  Time  Country 

23/8  05:45  Japan 

23/8  11:30  UK 

23/8  19:00  US 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

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About:FX Empire Analyst - Barry Norman

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