Gold Weekly Fundamental Analysis July 23-27, 2012, Forecast

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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 down trading at 1583.85 declining since Monday’s open at 1590.55. Gold is more stuck in an area of congestion between the 1595-1575 price zone and traded there all week.

Negative comments on the US economy and no indication of additional stimulus from Chairman Bernanke left markets hanging most of the week. Towards the end of the week with continued negative eco data, markets began to rethink the Chairman’s remarks.

Date

Last

Open

High

Low

Change %

Jul 20, 2012

1583.85

1583.35

1586.65

1572.95

0.03%

Jul 19, 2012

1583.45

1573.25

1591.35

1572.55

0.64%

Jul 18, 2012

1573.35

1583.75

1585.65

1567.35

-0.67%

Jul 17, 2012

1583.95

1590.35

1598.75

1571.15

-0.40%

Jul 16, 2012

1590.25

1590.55

1594.55

1577.95

-0.03%

Most of the week was focused on the EU and Spain as investors looked for safe harbors which gold did not benefit from, it seems that the prime safety these days is the JPY.

Gold is expected to meander aimlessly until eco data heats up towards midweek but the outlook for Gold is downwards.

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 16 – 20 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event 

Actual

Forecast

Previous

Jul 16

EUR

Core CPI y/y

1.6%

1.6%

1.6%

 

USD

Core Retail Sales m/m

-0.4%

0.1%

-0.4%

 

USD

Empire State Manufacturing Index

7.4

3.9

2.3

Jul 17

GBP

CPI y/y

2.4%

2.8%

2.8%

 

GBP

RPI y/y

2.8%

3.0%

3.1%

 

EUR

German ZEW Economic Sentiment

-19.6

-17.3

-16.9

 

USD

Core CPI m/m

0.2%

0.2%

0.2%

 

USD

TIC Long-Term Purchases

55.0B

45.7B

27.2B

 

USD

Capacity Utilization Rate

78.9%

79.2%

78.7%

 

USD

Industrial Production m/m

0.4%

0.4%

-0.2%

Jul 18

GBP

Claimant Count Change

6.1K

6.2K

6.9K

 

GBP

Unemployment Rate

8.1%

8.2%

8.2%

 

CHF

ZEW Economic Expectations

-42.5

 

-43.4

 

USD

Building Permits

0.76M

0.77M

0.78M

 

USD

Housing Starts

0.76M

0.74M

0.71M

 

USD

Crude Oil Inventories

-0.8M

0.5M

-4.7M

Jul 19

CHF

Trade Balance

2.25B

2.21B

2.52B

 

EUR

Current Account

10.9B

5.3B

5.5B

 

GBP

Retail Sales m/m

0.1%

0.6%

1.5%

 

USD

Unemployment Claims

386K

367K

352K

 

USD

Existing Home Sales

4.37M

4.64M

4.62M

 

USD

Philly Fed Manufacturing Index

-12.9

-7.9

-16.6

Jul 20

EUR

German PPI m/m

-0.4%

-0.2%

-0.3%

 

GBP

Public Sector Net Borrowing

12.1B

11.8B

16.1B


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

Previous

Jul 24

7:00

EUR

French Flash Manufacturing PMI

45.2

7:00

EUR

French Flash Services PMI

47.9

7:30

EUR

German Flash Manufacturing PMI

45.0

7:30

EUR

German Flash Services PMI

49.9

8:00

EUR

Flash Manufacturing PMI

45.1

8:30

GBP

BBA Mortgage Approvals

30.2K

9:00

EUR

Flash Services PMI

47.1

13:00

USD

Flash Manufacturing PMI

52.5

Jul 25

8:00

EUR

German Ifo Business Climate

105.3

 

8:30

GBP

Prelim GDP q/q

-0.3%

10:00

GBP

CBI Industrial Order Expectations

-11

13:00

EUR

Belgium NBB Business Climate

-13.2

14:00

USD

New Home Sales

369K

14:30

USD

Crude Oil Inventories

 

Jul 26

6:00

EUR

GfK German Consumer Climate

5.8

8:00

EUR

M3 Money Supply y/y

2.9%

12:30

USD

Core Durable Goods Orders m/m

0.7%

12:30

USD

Unemployment Claims

 

14:00

USD

Pending Home Sales m/m

5.9%

Jul 27

27th-31st

GBP

Nationwide HPI m/m

-0.6%

All Day

EUR

German Prelim CPI m/m

-0.1%

7:00

CHF

KOF Economic Barometer

1.16

12:30

USD

Advance GDP q/q

1.9%

13:55

USD

Revised UoM Consumer Sentiment

72.0

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