Gold Weekly Fundamental Analysis- November 30 – December 4, 2015 – Forecast

Weekly Analysis and Recommendations:

Gold took a big hit on the last day of the week, while bouncing up and down throughout the trading week gold bears won out with gold ending at 1055.90 down over $14 on the single day. Gold is down 1.90% for the week and almost 8% for the month. A brief rally at the start of the week when a Turkish fighter shot down a Russian bomber sparked some safe haven buying, but ultimately proved an opportunity for more sales.

US markets being shut for Thanksgiving Day did not help, but the US consumer seem flush enough to judge from Black Friday takings while US economic data gets stronger as the end of the year nears.

Meanwhile, there was some disappointment in the figures for physical demand from India and China.

On Thursday, the All India Gems & Jewellery Trade Federation suggested gold demand may fall to an eight-year low of 150-175 tons in the fourth quarter of 2015. Poor investment demand and the impact of droughts on farmers’ income were cited as reasons. India at one point was set to resume its traditional position as the number one consumer market for gold.

It may still yet, with the All India Federation still seeing gold demand this year above 1,000 tonnes but also because its main rival China has seen its own demand tail-off recently.

China imported 25% less in October than in the unusually strong previous month, but the figure was also down on the year previously.

Imports in the first ten months of the year are 1.6% higher at 653.5 tons, but Commerzbank comments that to reach 2014’s total; imports in November and December combined would have to rise to 160 tons.

That is well above October’s number, though Commerzbank suggests it is possible as last months was affected by the festival week at the start of the month. Chinese gold demand also generally increases towards the end of the year as the New Year Festival in February approaches.

Greenback-denominated commodities like gold become more expensive for foreign investors when the US currency rises. The Federal Reserve is widely expected to raise US rates for the first time in nearly a decade when it meets next on Dec. 15-16. Higher rates would rise the opportunity cost of holding non-yielding gold and could dent demand and boost the dollar.

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:

Upcoming Government Bond Auctions

Date Time Country 

Dec 01 11:30 UK 1.5% 2021 Gilt auction

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain Auctions

Dec 03 10:50 France Auctions OATs

Dec 03 11:03 Sweden Holds I/L bond auction

Dec 04 11:03 Sweden Holds I/L bond auction