Gold Fundamental Analysis October 8, 2014 Forecast

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Updated: Aug 24, 2015, 23:00 UTC

Analysis and Recommendations: Gold added $2.60 but continues to move between small gains and losses with little direction ahead of Wednesday FOMC minutes.

Gold Fundamental Analysis October 8, 2014 Forecast

Analysis and Recommendations:

Gold added $2.60 but continues to move between small gains and losses with little direction ahead of Wednesday FOMC minutes. Gold is trading at 1209.90. The Fed is on track to end stimulatory bond purchases that supported the U.S. economy through the recession, and is considering timing for the first interest-rate increases since 2006. The central bank releases minutes from its Sept. 16-17 meeting on Oct. 8. It convenes again on Oct. 29. Gold prices saw a good bounce today as stocks were weaker. After trading down all the way to the $1183 area in overnight trade, gold prices saw a strong rebound and as of this post are trading about $24 higher from the overnight low.

The latest commitment of traders report showed that large spec positions in gold are at their lowest levels since December. When the report reached these levels in December, gold prices proceeded to stage a sizable rebound and formed a double bottom on the daily chart in the process.

The dollar index is weaker today which may be lending some support to gold today. The rally in the dollar has likely been a big obstacle to any sustainable rallies in gold in recent weeks.

Historically, one of the most common reasons to have held gold was low real interest rates. The bull market of the 1970s, early 1980s and the previous decade up to 2013 were all associated with negative US real interest rates. Further, the fall in gold prices from 1982 to 2001 was associated with a prevailing period of rising and high real interest rate environment.

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
NZD	NZIER Business Confidence (Q3)	19%		32%
AUD	Interest Rate Decision (Oct)	2.50%	2.50%	2.50%
AUD	RBA Rate Statement
EUR	German Industrial Production	-4.0%	-1.5%	1.6%
JPY	BoJ Press Conference
GBP	Industrial Production (MoM)	0.0%	0.2%	0.4%
GBP	Manufacturing Production	0.1%	0.1%	0.3%
CAD	Building Permits (MoM) (Aug)		-13.0%	11.8%
USD	JOLTs Job Openings (Aug)		4.71M	4.67M

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
JPY	Adjusted Current Acct.		0.19T	0.10T
JPY	Current Account n.s.a.		0.198T	0.417T
CNY	HSBC Services PMI (Sep)		53.8	54.1
JPY	BoJ Monthly Report
CAD	Housing Starts (Sep)		196.0K	192.4K
USD	FOMC Meeting Minutes