Gold Fundamental Analysis September 21, 2012, Forecast

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Analysis and Recommendations:

Gold is trading at 1761.85 down 7.45. Gold held firm near $1770 an ounce, buoyed by a strong dollar following actions taken by various central banks to urge growth in their economies. In an unexpected move, Bank of Japan increased the size of their asset prices to tackle slowing down of domestic economy, which supported the dollar.

However, investors are anticipating more monetary actions from China in the face of recent bleak economic releases. Manufacturing activity in China contracted in September, a straight 11th month fall but slightly at a milder pace than August. The recent economic developments pushed the dollar index higher from its multi-month lows while the Euro eased down. The US Fed’s third round of quantitative easing and the bond buying plan by European Central Bank raised global inflation outlook. Concerns over inflation probably support bullion due to its inflation hedge appeal. Physical demand from India is expected to pick up in the coming sessions amid the key festive Diwali and marriage season. At the same time, investment demand for gold has been strong for the last week with the ETF holdings lifting to its all time highs.

As the dollar continued to strengthen on upbeat eco data with the Philly Fed coming in well above forecast and unemployment claims declining, traders began to think that a recovery was underway.

As the USD continued to strengthen some speculators sold off gold to take profits.

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 20, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 20

 

JPY

 

 

Trade Balance 

-0.47T

 

-0.37T 

 

-0.37T 

   

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

 

 

47.60 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

42.6

 

46.4 

 

46.0 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

47.3

 

45.3 

 

44.7 

 

 

 

 

EUR

 

 

Manufacturing PMI 

46.0

 

45.4 

 

45.1 

 

 

 

 

GBP

 

 

Retail Sales (MoM) 

-0.2%

 

-0.4% 

 

0.3% 

 

 

 

 

GBP

 

 

Retail Sales (YoY) 

2.7%

 

2.7% 

 

2.3% 

   

 

 

GBP

 

 

CBI Industrial Trends Orders 

-8

 

-15 

 

-21 

 

 

 

 

USD

 

 

Initial Jobless Claims 

382K

 

375K 

 

385K 

   

 

 

USD

 

 

Continuing Jobless Claims 

3272K

 

3300K 

 

3304K 

   

 

 

USD

 

 

Philadelphia Fed Manufacturing Index 

-1.9

 

-4.0 

 

-7.1 

   

 

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

There are no top tier eco data releases due in Europe or the US on the 21st.

Government Bond Auction

Date Time Country 

Sep 21 15:30 Italy  

 

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About: FX Empire Analyst - Barry Norman

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