Gold Weekly Fundamental Analysis October 1-5, 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 closed the week and month at 1774.35 after hitting a high of 1785.65 earlier in the day. Supported by monetary easing by the Federal Reserve and bond-buying by the European Central Bank, in addition to soothing words out of China’s central bank, gold has risen since mid-August.. And gold’s gained even as equities have wobbled, which for the time being is a good sign for the yellow metal.

Date

Last

Open

High

Low

Change %

Sep 28, 2012

1774.35

1779.85

1785.65

1769.65

-0.30%

Sep 27, 2012

1779.75

1757.05

1782.75

1755.35

1.29%

Sep 26, 2012

1757.15

1763.25

1768.05

1739.35

-0.34%

Sep 25, 2012

1763.15

1767.25

1777.55

1761.25

-0.22%

Sep 24, 2012

1767.05

1772.25

1772.55

1757.95

-0.30%

Gold prices surrendered gains on Friday as the dollar moved into positive territory against a basket of currencies, but the metal stayed on track for its biggest quarterly gain in more than two years on the back of this month’s central bank easing measures. The precious metal is within $10 of the 6-1/2 month high it hit earlier in September after the Federal Reserve unveiled a third round of gold-friendly quantitative easing, a move widely tipped to spark a rally back above $1,800 an ounce.

Gold is on track to climb 10.9% this quarter, its best quarterly performance since the second three months of 2010, although gains in the dollar on the back of the euro zone debt crisis have kept prices in check.

Bad news continued to dog Europe on Friday as Spain’s borrowing costs rose back above 6% and European shares dropped. The upbeat reaction to Madrid’s new debt cutting plans gave way to anxiety over its troubled banks, France’s finances and faltering global growth.

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 September 24-28, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Sep. 24 

EUR

German Ifo Business Climate Index 

101.4

102.5

102.3

 

EUR

German Current Assessment 

110.3

111.0

111.1

 

EUR

German Business Expectations 

93.2

95.0

94.2

Sep. 25

EUR

GfK German Consumer Climate 

5.9

5.9

5.9

 

GBP

BBA Mortgage Approvals 

30.5K

28.6K

28.8K

 

USD

CB Consumer Confidence 

70.3

63.0

61.3

 Sep. 26

EUR

German 10-Year Bund Auction 

1.520%

 

1.420%

 

GBP

CBI Distributive Trades Survey 

6

5

-3

 

EUR

German CPI (MoM) 

0.0%

0.0%

0.4%

 

EUR

German CPI (YoY) 

2.0%

2.0%

2.1%

 

USD

New Home Sales 

373K

380K

374K

 Sep. 27

EUR

German Unemployment Change 

9K

10K

11K

 

GBP

Business Investment (QoQ) 

0.9%

-1.5%

-1.5%

 

GBP

Current Account 

-20.8B

-12.4B

-15.4B

 

GBP

GDP (QoQ) 

-0.4%

-0.5%

-0.5%

 

GBP

GDP (YoY) 

-0.5%

-0.5%

-0.5%

 

EUR

Italian 10-Year BTP Auction 

5.24%

 

5.82%

 

USD

Core Durable Goods Orders (MoM) 

-1.6%

0.3%

-1.3%

 

USD

Durable Goods Orders (MoM) 

-13.2%

-5.0%

3.3%

 

USD

Initial Jobless Claims 

359K

378K

385K

 

USD

GDP (QoQ) 

1.3%

1.7%

1.7%

 

USD

Continuing Jobless Claims 

3271K

3285K

3275K

 

USD

Pending Home Sales (MoM) 

-2.6%

-0.7%

2.6%

 Sep. 28

EUR

French GDP (QoQ) 

0.0%

0.0%

0.0%

 

EUR

French Consumer Spending (MoM) 

0.4%

-0.1%

0.4%

 

CHF

KOF Leading Indicators 

1.67

1.57

1.59

 

EUR

CPI (YoY) 

2.7%

2.4%

2.6%

 

USD

Core PCE Price Index (MoM) 

0.1%

0.1%

0.1%

 

USD

Personal Spending (MoM) 

0.5%

0.5%

0.4%

 

USD

Chicago PMI 

49.7

53.0

53.0

 

USD

Michigan Consumer Sentiment 

78.3

79.0

79.2

Historical: From 2010 to present

Highest: 1921.05 on Sep 06, 2011

Average: 1457.33 over this period

Lowest:  1044.85 on Feb 05, 2010

 

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

Date

Time

Currency

Event

Forecast

Previous

Oct. 01 

08:15

CHF

Retail Sales (YoY) 

5.0% 

3.2% 

 

08:30

CHF

SVME PMI 

47.0 

46.7 

 

15:00

USD

ISM Manufacturing Index 

49.8 

49.6 

Oct. 02 

07:00

GBP

Nationwide HPI (MoM) 

0.2% 

1.3% 

Oct. 03 

10:00

EUR

Retail Sales (MoM) 

-0.2% 

-0.2% 

Oct. 04

12:00

GBP

Interest Rate Decision 

0.50% 

0.50% 

 

12:00

GBP

BOE QE Total 

375B 

375B 

 

12:45

EUR

Interest Rate Decision 

0.75% 

0.75% 

Oct. 05

11:00

EUR

German Factory Orders (MoM) 

-0.7% 

0.5% 

Government Bond Auction

Date Time Country 

Oct 01 10:00 Norway 

Oct 02 09:15 Austria 

Oct 02 09:30 Belgium 

Oct 02 09:30 UK 

Oct 02 14:30 UK 

Oct 03 09:10 Sweden 

Oct 03 10:00 Norway 

Oct 04 08:30 Spain 

Oct 04 08:50 France 

Oct 04 15:00 US 

Oct 05 15:30 Italy 

 

 

 

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About: FX Empire Analyst - Barry Norman

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