Gold Fundamental Analysis September 4, 2012 Forecast

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Analysis and Recommendations:

Gold is trading at 1690.15 unable to break the 1700 price level, but strong none the less. With hopes of Fed stimulus or at least stimulus from the ECB or the PBoC precious metals remain strong.

US markets are closed today, so traders are a bit more relaxed, and are enjoying the elation from Mr. Bernanke’s speech on Friday as they look forward to the ECB meet this week.

Gold sprung back on heavy trades nearing its five-month high after the US Fed Chairman Ban Bernanke remarked the US employment market is still in ‘grave’ stage. The US Fed Chairman opened the door more wide for further easing of policy but did not provide clues of any imminent actions. Hopes of another round of monetary stimulus drove investors to bet more on rising bullion prices. Loosening monetary policy always attract investors to bullion due to its inflation hedge appeal.

However, more economic stimulus actions are broadly anticipated from Chinese central bank after the HSBC official purchasing managers index fell to more than 9 month low.  As per US CFTC report, money managers raised their net long positions in gold futures and option contracts to the highest level in more than five months in the week ending last Friday. 

At the same time, going ahead, this week is fully packed with key economic releases like US Non-farm payrolls, US ISM manufacturing, and the European Central Bank’s rate announcement that could guide bullion’s further direction.

Just a heads up since gold is volatile and will react to most economic indicators we will begin to post the daily calendar with events that could affect the price of gold. The gold price is sensitive to a number of scheduled U.S. and Euro area macroeconomic announcements—including retail sales, non-farm payrolls, and inflation. Gold’s high sensitivity to real interest rates and its unique role as a safe-haven and store of value typically leads to a counter-cyclical reaction to surprise news, in contrast to their commodities. It also shows a particularly high sensitivity to negative surprises that might lead financial investors to become more risk averse.  

These results have a number of implications. To reduce the uncertainty of the return on gold transactions, traders may wish to time their orders flow so as to avoid the release of information that has been shown to affect prices. For longer-term market participants, these results provide confirmation of the pro-cyclical bias of many commodities and gold’s role as a safe-haven during periods of economic uncertainty.

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.

Actual versus Forecast Economic Releases. US and CAD markets are closed for a holiday

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Sep. 03

 

KRW

 

 

South Korean CPI (YoY) 

1.2%

 

1.4% 

 

1.5% 

 

 

 

 

KRW

 

 

South Korean CPI (MoM) 

0.4%

 

0.5% 

 

-0.2% 

 

 

 

 

JPY

 

 

Capital Spending 

7.70%

 

8.90% 

 

3.30% 

 

 

 

 

AUD

 

 

Company Gross Operating Profits (QoQ) 

-0.7%

 

1.0% 

 

-3.7% 

   

 

 

AUD

 

 

Retail Sales (MoM) 

-0.8%

 

0.2% 

 

1.2% 

   

 

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.60

 

 

 

47.80 

 

 

 

 

INR

 

 

Indian Trade Balance 

-15.5B

 

-8.8B 

 

-10.3B 

 

 

 

 

CHF

 

 

SNB Chairman Thomas Jordan speaks 

 

 

 

 

 

 

 

 

 

TRY

 

 

Turkish CPI (MoM) 

0.56%

 

0.25% 

 

-0.23% 

 

 

 

 

CHF

 

 

Retail Sales (YoY) 

3.2%

 

4.3% 

 

3.3% 

   

 

 

CHF

 

 

SVME PMI 

46.7

 

49.0 

 

48.6 

 

 

 

 

EUR

 

 

Italian Manufacturing PMI 

43.60

 

45.00 

 

44.30 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

46.0

 

46.2 

 

46.2 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

44.7

 

45.1 

 

45.1 

 

 

 

 

EUR

 

 

Manufacturing PMI 

45.1

 

45.3 

 

45.3 

 

 

 

 

GBP

 

 

Manufacturing PMI 

49.5

 

46.2 

 

45.2 

   

 

Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these

Date

Time

Currency

Event

Forecast

 

Previous

 

 

Sep. 04

05:30

AUD

Interest Rate Decision 

3.50% 

 

3.50% 

 

 

 

15:00

USD

ISM Manufacturing Index 

50.0 

 

49.8 

 

 

Sep. 05

02:30

AUD

GDP (QoQ) 

0.8% 

 

1.3% 

 

 

 

14:00

CAD

Interest Rate Decision 

1.00% 

 

1.00% 

 

 

Sep. 06

02:30

AUD

Employment Change 

5.0K 

 

14.0K 

 

 

 

02:30

AUD

Unemployment Rate 

5.3% 

 

5.2% 

 

 

 

12:00

GBP

Interest Rate Decision 

0.50% 

 

0.50% 

 

 

 

12:45

EUR

Interest Rate Decision 

0.75% 

 

0.75% 

 

 

Sep. 07

15:00

CAD

Ivey PMI 

58.0 

 

62.8 

   

 

Government Bond Auction

Date  Time  Country 

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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