Gold Weekly Fundamental Analysis July 16-20, 2012, Forecast

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By FX Empire Analyst - Barry Norman
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Introduction: Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets.

  • Gold reacts to uncertainty in the markets
  • Gold reacts to the Federal Reserve and monetary policy
  • A drop in major currencies can indicate a run into gold.
  • Remember investors tend to take profit from gold so watch for trading opportunities when investors are taking profits, not moving out of the markets.

 

Weekly Analysis and Recommendations:

Gold ended the week at 1589.05. Thursday's gains continued through on Friday with gold opening higher at 1584.50/1585.50. Early session declines to an intraday low of 1578.50/1579.50 were pared as the metal regained strength from strong bids. Rising in tandem with equities, gold quickly reached an intraday high of 1596.50/1597.50 midmorning. Relaxing near the high end of its range throughout the remainder of the session, gold then ended the week at 1591.80/1592.80

Date

Last

Open

High

Low

Change %

Jul 13, 2012

1589.05

1568.15

1596.45

1567.15

1.33%

Jul 12, 2012

1568.25

1576.85

1576.85

1554.55

-0.54%

Jul 11, 2012

1576.75

1571.35

1583.05

1566.95

0.36%

Jul 10, 2012

1571.15

1587.65

1601.25

1564.45

-1.05%

Jul 09, 2012

1587.75

1578.45

1593.05

1578.05

0.56%

Gold is closing higher this week at current 1592. This was the tenth consecutive week of alternating between UP and Down weeks. The ranges have become smaller with the weekly price action forming a triangular pattern with current boundaries seen at 1555 and 1618. The deeper we move into the triangle the less of an explosion the breakout will yield. We see 1528 and 1640 the more significant break out levels. We would expect a break of either of these levels to yield at least a $200 move to 1300s or 1800s

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.

Major Economic Events for the week of July 9 – 13 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

 Event

Actual

Forecast

Previous

Jul 9

EUR

Sentix Investor Confidence

-29.6

-26.3

-28.9

 

GBP

BRC Retail Sales Monitor y/y

1.4%

 

1.3%

GBP

RICS House Price Balance

-22%

-15%

-17%

Jul 10

EUR

French Industrial Production m/m

-1.9%

-0.9%

1.4%

EUR

Italian Industrial Production m/m

0.8%

-0.3%

-2.0%

GBP

Manufacturing Production m/m

1.2%

0.1%

-0.8%

GBP

Trade Balance

-8.4B

-9.0B

-9.7B

GBP

NIESR GDP Estimate

-0.2%

 

0.1%

Jul 11

USD

Trade Balance

-48.7B

-48.5B

-50.6B

 

USD

Crude Oil Inventories

-4.7M

-1.3M

-4.3M

Jul 12

EUR

Industrial Production m/m

0.6%

0.0%

-1.1%

 

USD

Unemployment Claims

350K

376K

376K

USD

Import Prices m/m

-2.7%

-1.5%

-1.2%

USD

Federal Budget Balance

-59.7B

-91.7B

-124.6B

Jul 13

CHF

PPI m/m

-0.3%

-0.2%

-0.2%

USD

PPI m/m

0.1%

-0.5%

-1.0%

USD

Prelim UoM Consumer Sentiment

72.0

73.5

73.2

 

Historical

Highest: 1921.05 on Sep 06, 2011

Average: 1418.48 over this period

Lowest: 1026.95 on Oct 28, 2009

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

 Event

Forecast

Previous

Jul 16

7:15

CHF

Industrial Production q/q

-7.5%

8.8%

9:00

EUR

CPI y/y

 

2.4%

12:30

USD

Retail Sales m/m

 

-0.2%

12:30

USD

Empire State Manufacturing Index

 

2.3

14:00

USD

Business Inventories m/m

 

0.4%

Jul 17

8:30

GBP

CPI y/y

 

2.8%

9:00

EUR

German ZEW Economic Sentiment

 

-16.9

9:15

ALL

G7 Meetings

   

12:30

USD

CPI m/m

 

-0.3%

13:00

USD

TIC Long-Term Purchases

 

25.6B

13:15

USD

Industrial Production m/m

 

-0.1%

Jul 18

8:30

GBP

Claimant Count Change

 

8.1K

8:30

GBP

Unemployment Rate

 

8.2%

9:00

CHF

ZEW Economic Expectations

 

-43.4

12:30

USD

Building Permits

 

0.78M

12:30

USD

Housing Starts

 

0.71M

14:30

USD

Crude Oil Inventories

 

-4.7M

Jul 19

6:00

CHF

Trade Balance

 

2.48B

8:00

EUR

Current Account

 

4.6B

8:30

GBP

Retail Sales m/m

 

1.4%

12:30

USD

Unemployment Claims

   

14:00

USD

Existing Home Sales

 

4.55M

14:00

USD

Philly Fed Manufacturing Index

 

-16.6

Jul 20

6:00

EUR

German PPI m/m

 

-0.3%

8:30

GBP

Public Sector Net Borrowing

 

15.6B

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