Gold Monthly Fundamental Forecast October 2012

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Outlook and Recommendation

Gold closed the month and quarter trading at 1774.35. As the month drew to an end gold surged on global uncertainties and poor eco data in the US but keeps playing a cat and mouse game with the USD.  Gold posted its biggest quarterly rise in more than two years, tracking a weaker euro as Spain’s struggle to control its finances worried investors.

Caution has returned to the market after central banks’ stimulus measures greatly cheered gold bugs and sent bullion up for four straight months. Investors are now seeking fresh catalysts amid the still-grim picture in the euro zone.

Spain’s debt levels are set to rise next year, piling pressure on the government to apply for aid as it pours funds into cash-strapped regions, an ailing banking system and rising refinancing costs, its budget showed on Saturday.

The euro fell to its lowest in nearly three weeks on uncertainty over Spain’s bailout plan, while the dollar index rose to its highest since mid-September, making dollar-priced gold less attractive to buyers holding other currencies.

Highest: 1787.55

Lowest: 1685.35

Difference: 102.20

Average: 1748.15

Change %: 4.85

Soft Chinese factory data sent gold prices falling on sentiment the global economy continues softening. The HSBC China Manufacturing purchasing managers index came to 47.9 for September from 47.6 in August.   A reading of 50 separates expansion and contraction. 
  
Meanwhile in Japan, big manufacturers remained pessimistic over the economy during the July-September period. The Bank of Japan reported earlier that the Tankan Manufacturing index fell to a seasonally adjusted -3 in the third quarter, from -1 in the second quarter. Analysts had expected Tankan Manufacturing index to fall to -3 in the last quarter. 
  
In the U.S., meanwhile, the Chicago purchasing managers’ index contracted for the first time since September 2009, dipping to seasonally adjusted 49.7 compared to 53.0 August. 

 

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Central Bank Name: Fed Reserve

Date of next meeting or last meeting: Sep 13, 2012

Current Rate: 0.00%-0.250%

Statement highlights of last meeting: Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable. The FOMC announced QE3.

Economic events for the month of October affecting EUR, CHF, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Oct 1

 8:30

GBP

Manufacturing PMI

49.5

49.5

 

14:00

USD

ISM Manufacturing PMI

50.0

49.6

Oct 2

8:30

GBP

Construction PMI

50.0

49.0

Oct 3

8:30

GBP

Services PMI

53.1

53.7

 

12:15

USD

ADP Non-Farm Employment Change

148K

201K

 

14:00

USD

ISM Non-Manufacturing PMI

53.4

53.7

Oct 4

11:00

GBP

Asset Purchase Facility

375B

375B

 

11:00

GBP

Official Bank Rate

0.50%

0.50%

 

Tentative

GBP

MPC Rate Statement

   
 

11:45

EUR

Minimum Bid Rate

0.75%

0.75%

 

12:30

EUR

ECB Press Conference

   
 

12:30

USD

Unemployment Claims

371K

359K

 

18:00

USD

FOMC Meeting Minutes

   

Oct 5

7:00

CHF

Foreign Currency Reserves

 

418.4B

 

12:30

USD

Non-Farm Employment Change

111K

96K

 

12:30

USD

Unemployment Rate

8.2%

8.1%

Oct 8

7:15

CHF

CPI m/m

 

0.0%

Oct 9

8:30

GBP

Manufacturing Production m/m

 

3.2%

Oct 11

All Day

ALL

G7 Meetings

   
 

12:30

USD

Trade Balance

 

-42.0B

 

12:30

USD

Unemployment Claims

   

Oct 12

12:30

USD

PPI m/m

 

1.7%

 

13:55

USD

Prelim UoM Consumer Sentiment

   

Oct 15

12:30

USD

Core Retail Sales m/m

 

0.8%

 

12:30

USD

Retail Sales m/m

 

0.9%

Oct 16

8:30

GBP

CPI y/y

 

2.5%

 

8:30

GBP

PPI Input m/m

   
 

9:00

EUR

German ZEW Economic Sentiment

   
 

12:30

USD

Core CPI m/m

   

Oct 17

8:30

GBP

Claimant Count Change

   
 

8:30

GBP

MPC Meeting Minutes

   

Oct 18

8:30

GBP

Public Sector Net Borrowing

   
 

8:30

GBP

Retail Sales m/m

   
 

14:00

USD

Philly Fed Manufacturing Index

   

Oct 19

14:00

USD

Existing Home Sales

   

Oct 24

7:00

EUR

French Flash Manufacturing PMI

   
 

7:30

EUR

German Flash Manufacturing PMI

   
 

8:00

EUR

German Ifo Business Climate

   
 

14:00

USD

New Home Sales

   
 

18:15

USD

FOMC Statement

   

Oct 25

12:30

USD

Core Durable Goods Orders m/m

   
 

12:30

USD

Unemployment Claims

   
 

14:00

USD

Pending Home Sales m/m

   

Oct 26

8:30

GBP

Prelim GDP q/q

   
 

12:30

USD

Advance GDP q/q

 

1.3%

Oct 30

14:00

USD

CB Consumer Confidence

   

Oct 31

12:15

USD

ADP Non-Farm Employment Change

   

 

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