Gold Weekly Fundamental Analysis, October 6-10 2014, Forecast

Weekly Analysis and Recommendations:

Gold tumbled $23 on Friday to touch its lowest in several weeks at 1191.6. Gold prices are set to drop further next week as the prospect of a stronger US dollar, buoyed by a recovering US economy, is expected to weigh on the precious metal’s safe-haven status per an article in IBT.

As many as 16 of 26 analysts polled in a Kitco Gold Survey said they expected gold prices to trade lower next week, while seven predicted that prices will rise and three forecast prices to trade sideways.

Kitco said in their report that “New highs for the dollar, new lows for gold. Is there any factor more important? We all know the reasons why and they aren’t going to change soon. A correction will come as the dollar is overbought and gold oversold, but sometimes these conditions persist longer then we expect. I expect a lower gold market next week.”

Gold was in full retreat on Friday after September’s non-farm payrolls and unemployment numbers were well above forecasts. Some 248,000 jobs were created in September while US unemployment also fell to its lowest since 2008 at 5.9%.

The news sparked immediate gains for the dollar on speculation over interest rates. Economists said it a less of when they go up in 2015, but how much earlier than was thought previously.

The second half of next year had been the consensus, but this has been pulled back to June with many economists saying even earlier would not be a surprise if the US economy continues to add jobs at this rate.

Gold has been hit directly by the rise in the US dollar, which traditionally moves in the opposite direction to the currency and also US bond yields.

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.

Historical: From 2011 to present

Highest: 1911.60 on Sep 06, 2011

Average: 1633.45 over this period

Lowest: 1180.35 on Jun 28, 2013

Events You Should Be Monitoring This Week:

CAD                      Ivey PMI

NZD                      NZIER Business Confidence

JPY                        Monetary Policy Statement

AUD                      Cash Rate

AUD                      RBA Rate Statement

JPY                        BOJ Press Conference

GBP                       Manufacturing Production m/m

CAD                      Building Permits m/m

USD                      FOMC Meeting Minutes

AUD                      Employment Change

AUD                      Unemployment Rate

GBP                       Asset Purchase Facility

GBP                       Official Bank Rate

GBP                       MPC Rate Statement

USD                      Unemployment Claims

EUR                      ECB President Draghi Speaks

CAD                      Employment Change

CAD                      Unemployment Rate

Upcoming Government Bond Auctions

Date Time Country 

Oct 07 06:00 Swiss Announces details of optional bond auction on Oct 08

Oct 07 09:00 Norway Bond auction

Oct 07 09:15 Austria RAGB auction

Oct 07 9:30 UK Auctions 3.5% 2045 Gilt

Oct 07 15:30 Italy Announces details of BOT auction on Oct 10

Oct 07 17:00 US 3Y Note auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction