Gold Fundamental Analysis October 29, 2014 Forecast

By:

Updated: Aug 25, 2015, 03:00 UTC

Analysis and Recommendations: Gold remains in the red with little direction ahead of the US Fed meeting starting later today. Gold is down $1 at 1228.20

Gold Fundamental Analysis October 29, 2014 Forecast

Analysis and Recommendations:

Gold remains in the red with little direction ahead of the US Fed meeting starting later today. Gold is down $1 at 1228.20 but moving between small gains and losses. Despite the sharp recovery in the stock indices, strength in the US dollar and increase in bond yields, precious metals ended last week mostly flat in anticipation of the FOMC meeting this week. While the Fed is expected to announce the end of its quantitative easing program, with potentially negative implications for gold, the latest polling results from Switzerland showed an increasing probability for passing the Swiss Gold referendum which would force the Swiss National Bank to purchase significant quantities of gold. China’s gold imports from Hong Kong reached a six-month high, contributing to a tighter physical market. Physical tightness is also manifesting in GOFO rates moving into negative territory for the first time since June.

Even with the start of Diwali, the Indian festival of lights, which often leads to increased bullion demand in the world’s second-largest gold-consuming country, investors have not been warming to gold ETFs. Since the start of this month, the SPDR Gold Shares the largest gold ETF, has lost $959.1 million in assets while the iShares Gold Trust and the ETFS Physical Swiss Gold Shares have lost over $18 million combined.

Gold and equities have shared an inverse relationship between since the beginning of 2013. Extending to new stock market highs would likely be a more immediate risk factor for the price of gold.

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:

Cur.	Event	Actual	Forecast	Previous
JPY	Retail Sales (YoY) (Sep)	2.3%	0.6%	1.2%
USD	Core Durable Goods		0.5%	0.4%
USD	Durable Goods Orders		0.5%	-18.4%
USD	S&P/CS HPI Composite –		5.8%	6.7%
USD	CB Con. Confidence		87.0	86.0

Upcoming Economic Events that you should be monitoring:

Time	Cur.	Imp.	Event	Actual	Forecast	Previous
	JPY		Industrial Production		2.2%	-1.9%
	NZD		Business Confidence			13.4%
	CAD		RMPI (MoM) (Sep)		-1.0%	-2.2%
	USD		FOMC Statement
	USD		Fed Funds Target Rate		0.25%	0.25%