Gold Fundamental Analysis September 4, 2012 Forecast
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Analysis and Recommendations:
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
South Korean CPI (YoY)
South Korean CPI (MoM)
Company Gross Operating Profits (QoQ)
Retail Sales (MoM)
Chinese HSBC Manufacturing PMI
Indian Trade Balance
SNB Chairman Thomas Jordan speaks
Turkish CPI (MoM)
Retail Sales (YoY)
Italian Manufacturing PMI
French Manufacturing PMI
German Manufacturing PMI
Economic Highlights for the upcoming week… Tiers 3 keep your eyes on these
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
Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.comView all of FX Empire Analyst - Barry Norman's Articles