Gold Fundamental Analysis July 12, 2012, Forecast

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Analysis and Recommendations:

Gold declined to trade at 1571.85 as traders await the release of the FOMC minutes from the prior meeting. The minutes are due to be released towards the end of the trading day and might have some effect on prices but there are no expectations at this point. Traders will try to interpret and decipher the minutes to see exactly what the Fed has in mind.

Gold rebounded on heavy trades yesterday to post its biggest one-day drop since late June whereas today, gold is simply adrift without any direction.  The euro drifted lower, clinging near to a two-year low as the Euro zone ministers meeting disappointed investors on providing suitable measures to tackle Euro zone debt crisis.

European finance ministers failed to agree on a final figure for providing aid to ailing Spanish banks in their two day meeting that ended yesterday. Gold had been weighed down by a strong dollar recently amid concerns over prospective round of quantitative easing from the US Federal Reserve. However, investors are cautious about taking fresh positions ahead of a gauge of US economic releases, which could provide guidance for the metal later. The US FOMC meeting minutes, monthly budget statements and confidence numbers are the key events investors are closely watching out this week. At the same time physical gold demand was subdued as investors stayed away from markets due to range bound prices.  Meanwhile, CFTC data showed US traders and speculators raise their bullish bets in gold contracts to the highest level in two months.

In a day of cautious trade, commodities were seen rebounding from its initial losses. Euro Zone struggling to tackle its debt crisis and weak economic indicators from the US and China made investors risk averse. Spot gold was off its one-and-a half week low, rising nearly one percent. However, the firm US dollar kept a lid over the gains. In the previous session, the yellow metal posted its biggest daily fall since late June.

Gold extended the previous session losses, falling to its lowest in more than four week. Base metal complex in LME were mixed. LME copper was seen paring its earlier losses and ticked higher. However, prices were caught in a tight range as investors remained cautious ahead of slew of economic releases from China including GDP later this week

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 July 11, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 11

 

AUD

 

 

 

RBA Assist Gov Lowe Speaks 

 

 

 

 

 

 

 

 

 

KRW

 

 

 

South Korean Unemployment Rate 

3.2%

 

3.2% 

 

3.2% 

 

 

 

 

JPY

 

 

 

Tertiary Industry Activity Index (MoM) 

0.7%

 

0.2% 

 

-0.2% 

  

 

 

AUD

 

 

 

Westpac Consumer Sentiment 

3.70%

 

 

 

0.30% 

 

 

 

 

AUD

 

 

 

Home Loans (MoM) 

-1.2%

 

0.7% 

 

0.5% 

  

 

 

EUR

 

 

 

German CPI (MoM) 

-0.1%

 

-0.1% 

 

-0.1% 

 

 

 

 

EUR

 

 

 

German CPI (YoY) 

1.7%

 

1.7% 

 

1.7% 

 

 

 

 

EUR

 

 

 

German 10-Year Bund Auction 

1.310%

 

 

 

1.520% 

 

 

 

 

CAD

 

 

 

Trade Balance 

-0.8B

 

-1.0B 

 

-0.6B 

  

 

 

USD

 

 

 

Trade Balance 

-48.7B

 

-48.5B 

 

-50.6B 

  

 

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

Date

Time

Currency

 Event

Previous

Jul 12

9:00

EUR

Industrial Production m/m

-0.8%

12:30

USD

Unemployment Claims

 

12:30

USD

Import Prices m/m

-1.0%

18:00

USD

Federal Budget Balance

-124.6B

7:15

CHF

PPI m/m

-0.2%

Jul 13

12:30

USD

PPI m/m

-1.0%

13:55

USD

Prelim UoM Consumer Sentiment

73.2

Government Bond Auctions

Date  Time  Country 

Jul 12  09:10  Italy

Jul 12  09:30  UK

Jul 12  15:00  US

Jul 12  17:00  US

Jul 13  09:10  Italy

Jul 13  10:00  Belgium

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