Gold Fundamental Analysis August 9, 2013 Forecast

Analysis and Recommendations:

Gold gained $6.40 today to trade at 1291.70 as the dollar fell to a seven-week low against a basket of currencies, but doubts over when the Federal Reserve will begin scaling back its monetary stimulus program kept the metal in a narrow range. The dollar index slid to its lowest since mid-June on Thursday on uncertainty over Fed policy. Fed monetary stimulus measures, known as quantitative easing, were a key factor in driving gold prices to record highs in 2011, as they kept long-term interest rates at rock bottom while stoking fears over inflation. Speculation that the Fed may be set to taper QE has helped push gold prices down by nearly a quarter this year.

The president of the Cleveland Fed, Sandra Pianalto, seen as a centrist on policy, said on Wednesday the U.S. central bank could soon curb the pace of its bond-buying stimulus if recent improvement in the job market persists. “The bullion market’s lack of a reaction to Ms. Pianalto comments may indicate the degree of QE ‘tapering’ expectations already built into the gold price,” HSBC said in a note.  “An announcement by the Fed later in the year to withdraw QE would be seen as less of a surprise for the gold market.”

The world’s biggest gold-backed exchange-traded fund, New York’s SPDR Gold Shares, said its holdings fell by another 4.5 tons on Wednesday, bringing its total outflow for the week to 8.1 tons. Demand from China, which is poised to take over from India as the world’s biggest gold consumer this year, has grown after bullion’s recent correction, analysts say.

Among other precious metals, silver was up 0.7% at $19.69 an ounce. Spot platinum was up 0.6% at $1,443.74 an ounce, while spot palladium was up 0.9 percent at $727.22 an ounce. The premium of platinum, used in auto catalysts, over gold hit a two-year high of $157 an ounce on Thursday as the white metal outperformed. The metal has suffered in recent years from weak demand from European carmakers, but prices have been supported by threats to supply from South Africa and the launch of a new platinum ETF in Johannesburg, which added more than half a million ounces of metal to its holdings in less than three months.

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.

Economic Data August 8, 2013 actual v. forecast

 

Upcoming Economic Events that affect the CHF, EUR, GBP, CAD and USD

Government Bond Auction

Date Time Country 

Aug 09 00:30 Japan

Aug 09 10:30 Belgium

Aug 12 09:10 Norway

Aug 12 09:10 Italy

Aug 12 09:30 Germany

Aug 13 00:30 Japan

Aug 13 09:10 Italy

Aug 13 09:30 Belgium

Aug 13 14:30 UK

Aug 14 08:30 Spain

Aug 14 09:30 Germany

Aug 15 09:30 UK

Aug 15 11:00 Norway