Gold Fundamental Analysis October 17, 2014 Forecast

Analysis and Recommendations:

Gold eased by $6.30 to trade at 1238.50 today as traders wait on more US data. Investors moved back into risk on trading but cautiously. Gold steadied to trade near its highest in more than a month, as the dollar and European shares weakened on worries over the strength of the global economy, sending investors in search for assets perceived as safer.

The dollar was down 0.2 percent against a basket of main currencies, while European shares extended the previous session’s selloff, when they shed 3.2 percent to score their biggest one-day slide in almost four years. The US dollar made a U-turn after the release of positive economic data

“With all the global growth worries, you’d have to bet that gold holds its own here and may look to test $1,250 and higher depending on what the U.S. stock markets do this afternoon,” Societe Generale analyst Robin Bhar said.

Gold had wiped out this year’s gains amid expectations for higher U.S. borrowing costs, reducing the metal’s allure because it generally only offers investors returns through price gains. Money managers’ short gold positions are near a record, U.S. government data show.

“Gold’s rally has been a combination of a flight to safety and shorts being squeezed,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co. in Shanghai, referring to the unwinding of bets on lower prices. “‘The big selloff in other markets may cause some people to take profit on their gold positions to meet margin calls elsewhere.’’

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:

Government Bond Auction

Date Time Country Auction

Oct 20 12:00 Belgium OLO Auction

Oct 20 12:00 Slovakia Bond auction (for decision)

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Norway Bond auction

Oct 21 11:00 UK Auctions 2.75% 2024 Gilt

Oct 22 11:30 Germany Eur 2.0bn Aug 2046 Bund auction

Oct 23 11:03 Sweden I/L bond auction

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30 & 29

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29