Gold Fundamental Analysis March 26, 2015 – Forecast

Analysis and Recommendations:

Gold soared $5.40 adding the most after the release of a dismal US durable goods report which should put the Fed interest rate increase scenario on the back burner. Gold is trading at 1196.80. Gold’s longest run of gains in a year continued as a pickup in U.S. inflation increased the prospects for higher interest rates. The consumer-price index rose 0.2 percent in February, the first gain in four months, a Labor Department report showed Tuesday in Washington. Higher borrowing costs cut gold’s allure because the metal generally offers returns only through price gains.

Gold gained 3.8 percent in the previous five days in the longest run since February 2014, after Fed Chair Janet Yellen signaled last week that the central bank is in no hurry to raise rates, even as it dropped a pledge to be patient on tightening. Investors cut gold-backed holdings to the lowest since January. Bullion’s rally stalled below $1,200 an ounce because faster inflation “raises the probability of the U.S. Federal Reserve initiating interest rate hikes,” Commerzbank AG wrote in an e-mailed report.

Today’s disappointing US durable goods report might set the Fed back a bit but was not enough to push gold through the $1200 level.

“There is technical and psychological resistance as we approach $1,200,” Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London, said by e-mail. The level is also near the 61.8 percent retracement of the rally from November to January, a level singled out in Fibonacci analysis, he said. Some traders use charts to gauge buying and selling appetite.

Holdings in gold-backed exchange-traded products fell 0.7 metric ton to 1,625.9 tons as of Tuesday, the lowest since Jan. 16, data compiled by Bloomberg show.

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.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Thursday, March 26, 2015

Government Bond Auctions

Date Time Country

Mar 25 11:03 Sweden Sek 2bn 4.25% Mar 2019 & Sek 2bn 3.5% Jun 2022 bonds

Mar 25 11:15 Norway Holds bond auction

Mar 25 17:30 Italy Announces details of BTP/CCTeu on 30 Mar

Mar 25 19:00 US Usd 13bn 2-yr FRN, plus Usd 35bn 5-yr Notes

Mar 26 11:10 Italy Auctions CTZ/BTPei

Mar 26 19:00 US Usd 29bn 7-yr Notes

Mar 30 10:10 Italy Auctions BTPs/CCTeus

Apr 01 10:30 Germany Eur 4bn Apr 2020 Bobl

Apr 01 15:30 Sweden Details bond auction on 08 Apr

Apr 02 10:10 France Auctions OATs

Apr 02 16:00 US Announces 3/10 year Notes, plus 30-yr Bond