Gold Fundamental Analysis September 19, 2012 Forecast

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Analysis and Recommendations:

Gold is trading at 1763.75 down 4.25 in a light volume quiet day. Gold slightly corrected lower after rising in tandem with the Euro and risky assets following economic stimulus measures announced by the US Federal Reserve. Concerns over slowing Chinese growth rate and uncertainty whether Spain will formally ask for a bailout weighed on investors’ sentiments and lead profit booking yesterday. The US Fed’s open ended program of quantitative easing in a view to urge economic growth and the bond buying plan by European Central Bank raised global inflation outlook benefiting gold earlier.

The dollar index held steady above six month low while the Euro slightly eased but still traded firm. Currently, physical demand for gold is not much impressive from Asian countries as high prices prompted buyers to depend on scrap gold. However, demand from India is expected to pick up in the coming months amid key festive and marriage season. At the same time, the prevailing worst diplomatic crisis between China and Japan is likely to strengthen bullion due to its safe haven appeal.

Following a spectacular rally sparked off by the US Fed’s monetary easing and Germany’s approval to ESM, commodities are seen cooling off. Sentiments turned slightly sour as the market focus turned towards uncertainty prevailing over whether Spain will opt for the bailout package. Spot gold inched lower from its seven month high levels weighed down by declines in other commodities and the Euro. However, its inflation hedge appeal is likely to cushion the decline in prices. Silver followed the suit too, and prices retreated from its six month high.

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 September 18, 2012 actual v. forecast

Sep. 18

 

AUD

 

 

Monetary Policy Meeting Minutes 

             

 

 

CNY

 

 

China House Prices (MoM) 

-1.40%

     

-1.50%

   

 

 

GBP

 

 

Core CPI (YoY) 

2.1%

 

2.2%

 

2.3%

   

 

 

GBP

 

 

CPI (YoY) 

2.5%

 

2.5%

 

2.6%

   

 

 

GBP

 

 

RPI (YoY) 

2.9%

 

3.1%

 

3.2%

   

 

 

GBP

 

 

DCLG House Price Index (YoY) 

2.0%

 

2.8%

 

2.3%

   

 

 

GBP

 

 

CPI (MoM) 

0.5%

 

0.5%

 

0.1%

   

 

 

EUR

 

 

German ZEW Economic Sentiment 

-18.2

 

-19.0

 

-25.5

   

 

 

EUR

 

 

ZEW Economic Sentiment 

-3.8

 

-16.5

 

-21.2

   

 

 

USD

 

 

Current Account 

-117.4B

 

-125.5B

 

-133.6B

   

 

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

Date

Time

Currency

Event

Forecast

Previous

Sep. 19 

13:30

USD

Building Permits 

0.800M 

0.811M 

 

13:30

USD

Housing Starts 

0.765M 

0.746M 

 

15:00

USD

Existing Home Sales 

4.56M 

4.47M 

Sep. 20 

07:58

EUR

French Manufacturing PMI 

46.4 

46.0 

 

08:28

EUR

German Manufacturing PMI 

45.3 

44.7 

 

09:30

GBP

Retail Sales (MoM) 

-0.4% 

0.3% 

 

09:30

GBP

Retail Sales (YoY) 

2.7% 

2.8% 

 

11:00

GBP

CBI Industrial Trends Orders 

-15 

-21 

Government Bond Auction

Date Time Country 

Sep 19 09:10 Sweden 

Sep 19 09:30 Germany 

Sep 19 09:30 Portugal 

Sep 19 10:00 Norway 

Sep 20 08:30 Spain 

Sep 20 08:50 France 

Sep 20 09:30 UK 

Sep 20 09:50 France 

Sep 20 15:00 US 

Sep 20 17:00 US 

Sep 21 15:30 Italy

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