Gold Weekly Fundamental Analysis, December 24-28, 2012, Forecast

Introduction: Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets.

• Gold reacts to uncertainty in the markets
• Gold reacts to the Federal Reserve and monetary policy
• A drop in major currencies can indicate a run into gold.
• Remember investors tend to take profit from gold so watch for trading opportunities when investors are taking profits, not moving out of the markets.

 

Weekly Analysis and Recommendations:

Gold recovered on Friday climbing close to $11.00 after tumbling also over $30.00 earlier in the week. Risk on and risk off sentiment was all the rage in the market this week, all tied to the US negotations. After this week’s break in gold prices, the yellow metal is holding on to meager yearly gains as it is about to enter the last few trading days of 2012, and for the short term market watchers are keeping an eye on Thursday’s low.

Next week will feature light trade. Some markets are closed on Monday in Europe for Christmas Eve; Japan has a holiday on Monday, too. Most markets are closed on Tuesday for Christmas and some markets, including those in Canada, the U.K. and Australia, are closed Wednesday for Boxing Day.

In the U.S., the Comex division of the New York Mercantile Exchange will see regular day-session trade on Monday, but electronic trade closes early; markets are closed on Tuesday. Regular trade resumes on Wednesday.

With the fiscal cliff talks, people are taking advantage of (current) capital gains (tax rates) and taking profits ahead of the end of the year. The fiscal cliff is the combination of tax hikes and spending cuts that will occur next year, unless Congress acts to prevent it. Some of the discussion surrounding the fiscal cliff and how to avoid it centers on raising capital gains taxes.

I would like to take this time to express my best wishes to all of my readers during this holiday season and extend the best hopes for profitable trading in 2013.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of December 17-21 actual v. forecast for Euro, GPB, the Franc, and USD

 

Historical: From 2010 to present

Highest: 1921.05 on Sep 06, 2011

Average: 1457.33 over this period

Lowest: 1044.85 on Feb 05, 2010

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD