Gold Fundamental Analysis August 31, 2012, Forecast

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Analysis and Recommendations:

Gold is trading at 1662.05. Ambiguity prevailed in the market over the possible monetary easing by the leading central banks to shore up the economic growth, keeping markets in tight ranges. Investors choose a wait and watch approach prior to the US Federal Reserve Chairman’s speech in Jackson Hole Symposium starting tomorrow in Wyoming. However, comments by the Chinese Premier that China may consider to buy more EU government bonds after evaluating risks soothed markets to certain extend. Base metals in LME were seen rebounding following the comments by the Chinese Premier. LME copper inched higher after three consecutive sessions of decline.

Nickel gained the most, rising about one per cent. Base metals were seen paring initial losses and inching higher. Yet, investors stayed cautious ahead of US weekly jobs data and Bernanke’s speech tomorrow capping gains. Meanwhile, precious metal continued to move in tight ranges, looking out for cues for further directional moves amid speculation roving over QE3.

Gold held steady in listless trading ahead of the speech from the US Federal Reserve Chairman, due on Friday. Fresh economic stimulus measures are widely anticipated strengthening hopes of another round of quantitative easing from US. Quantitative easing from central banks most likely lifts the inflation outlook which could benefit bullion due to its inflation hedge appeal. Even as gold continues to look towards currencies for direction, the Dollar and Euro remained steady due to cautious investors staying away from speculative trading before the key Jackson Hole symposium. Central banks and finance ministers are scheduled to meet at Jackson Hole on August 31 and September 01. Apart from the meeting, investors will also keenly watch the outcome of US Personal Consumption Expenditure and jobless claims data for an immediate direction on bullion. Physical demand from India, the biggest consumer of gold remains steady even during peak festive and marriage season due to record high domestic prices. At the same time demand for gold backed exchange traded funds stay unchanged.

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 30, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 30

 

JPY

 

 

Retail Sales (YoY) 

-0.8%

 

-0.2% 

 

0.2% 

 

 

 

 

AUD

 

 

Building Approvals (MoM) 

-17.3%

 

-5.0% 

 

-1.0% 

   

 

 

AUD

 

 

Private New Capital Expenditure (QoQ) 

3.4%

 

2.4% 

 

7.7% 

   

 

 

DKK

 

 

Danish Unemployment Rate 

4.70%

 

4.70% 

 

4.60% 

 

 

 

 

EUR

 

 

German Unemployment Rate 

6.8%

 

6.8% 

 

6.8% 

 

 

 

 

EUR

 

 

German Unemployment Change 

9K

 

8K 

 

9K 

   

 

 

EUR

 

 

Italian 10-Year BTP Auction 

5.82%

 

 

 

5.96% 

 

 

 

 

USD

 

 

Core PCE Price Index (MoM) 

0.0%

 

0.1% 

 

0.2% 

 

 

 

 

CAD

 

 

Current Account 

-16.0B

 

-15.0B 

 

-10.2B 

   

 

 

USD

 

 

Personal Spending (MoM) 

0.4%

 

0.4% 

 

0.0% 

 

 

 

 

USD

 

 

Initial Jobless Claims 

374K

 

370K 

 

374K 

   

 

 

USD

 

 

Continuing Jobless Claims 

3316K

 

3307K 

 

3321K 

   

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

Date

Time

Currency

Event

Forecast

Previous

Aug.31 

07:00

GBP

Nationwide HPI (MoM) 

0.1% 

-0.7% 

 

10:00

EUR

CPI (YoY) 

2.5% 

2.4% 

 

14:45

USD

Chicago PMI 

53.5 

53.7 

 

14:55

USD

Michigan Consumer Sentiment 

73.6 

73.6 

Government Bond Auctions

Aug 31  14:30  UK  Publication of the Q4 Gilt operations calendar

Sep 03  09:10  Norway  Bond auction

Sep 03  10:00  Belgium  OLO auction

Sep 04  00:30  Japan  Auctions 10Y JGBs

Sep 04  09:15  Austria  Bond auction

Sep 04  09:30  Belgium  Auctions Dec 2012 (3M) & Feb 2013 (6M) T-bills

Sep 04  14:30  UK  Details 0.75% 2034 I/L Gilt & 1.75% Sep 2022 Gilt on Sep

Sep 05  09:10  Sweden  Nominal bond auction

Sep 05  09:30  Germany  Eur 5.0bn Sep 2022 Bund auction

Sep 05  09:30  UK  4.5% 2042 Gilt auction

Sep 06  00:30  Japan  Auctions 30Y JGBs

Sep 06  08:30  Spain  Bono auction

Sep 06  08:50  France  OAT auction

Sep 06  09:10  Sweden  I/L bond auction

Sep 06  15:00  US  Announces 3Y Notes on Sep 11, 10Y Notes on Sep 12 &

Sep 07  15:30  Italy

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About: FX Empire Analyst - Barry Norman

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