Economic Events: (GMT)
Just a heads up since gold is volatile and will react to most economic indicators we will begin to post the daily calendar with events that could effect the price of gold.
The gold price is sensitive to a number of scheduled U.S. and Euro area macroeconomic announcements–including retail sales, non-farm payrolls, and inflation. Gold’s high sensitivity to real interest rates and its unique role as a safe-haven and store of value typically leads to a counter-cyclical reaction to surprise news, in contrast to their commodities. It also shows a particularly high sensitivity to negative surprises that might lead financial investors to become more risk averse.
These results have a number of implications. To reduce the uncertainty of the return on gold transactions, traders may wish to time their orders flow so as to avoid the release of information that has been shown to affect prices. For longer-term market participants, these results provide confirmation of the pro-cyclical bias of many commodities and gold’s role as a safe-haven during periods of economic uncertainty.
13:15 USD ADP Nonfarm Employment Change 190K 325K
The ADP National Employment Report is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients. The release, two days ahead of government data, is a good predictor of the government’s non-farm payroll report. The change in this indicator can be very volatile.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
Gold Fundamental Analysis Feb. 1, 2012, Forecast
Analysis and Recommendations:
Gold is trading at 1735.85 after pushing through 1750.00 in earlier trading. It seems the jittery nerves and worries of investors have found that gold is a safe bet at the moment. All of this has been brought on by a weekend of promises from Greek and EU leaders along with the negotiators from the IIF all making statements that a deal had been reached. Portugal’s borrowing rate soared to record levels today, compounding the problems in Europe.
Gold will probably continue to rise over the next week while investors try to figure out just what is happening. Gold will probably bounce between support and resistance over the next few days. Futures were likely to find support at USD1,714.45 Friday’s low and resistance at USD1,760.35, the high from December 8
The US had lackluster consumer confidence report and a showing another drop in housing prices by 1.3%
Originally posted here
