By FXEmpire.com
Analysis and Recommendations:
Gold is trading today at 1590.65 after falling in early trading; gold was able to rebound after the disappointing US retail sales reports. (see below).
Gold futures edged modestly lower in range bound trade on Monday, as market participants looked ahead to Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the U.S. Congress on Tuesday and Wednesday. The euro was broadly lower against its major counterparts on Monday, as concerns over the euro zone debt crisis and rising peripheral bond yields weighed on the market. Stock markets edged higher during l on Monday, as market sentiment found mild support amid growing expectations China will increase efforts to boost its slowing economy. European stocks were little changed in quiet trade on Monday ahead of the Bernanke’s speech.
Cautious optimism prevailed in the market prior to the presentation of semi-annual monetary policy report by the US Federal Reserve Chairman before the US Congress this week. Commodities were trapped in thin ranges as investors keenly wait for Bernanke’s testimony for fresh and solid indications on another round of quantitative easing. Meanwhile, comments by the Chinese Premier that the Government will beef up steps to bolster economic growth improved the sentiments. Yet, investors remained worried over slowdown in the world’s second largest economy. Bullion was trading in a steady thin range with a mild negative bias as investors preferred to stay on the sideline ahead of the key events. Firming dollar weighed on, restricting extension of the previous session gains in the yellow metal. LME base metal complex were in red with copper retreating from its one week high it hit in the previous session. However, hopes of an additional stimulus measures limited losses.
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 affect 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.
We have two situations that might push the volatility level for gold, on Tuesday, Fed Chairman Bernanke is due to give him monthly testimony to congress and its speech will most likely touch on monetary policy and what the Fed can and will do to help the ailing economy. Also rumors continue to grow that the PBoC is about to announce additional monetary stimulus to jumpstart the Chinese economy.
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.
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.
Economic Data Releases for Monday, July 16, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul. 16 |
GBP |
Rightmove House Price Index (MoM) |
-1.7% |
1.0% |
|
|
EUR |
CPI (YoY) |
2.4% |
2.4% |
2.4% |
|
|
EUR |
Core CPI (YoY) |
1.6% |
1.6% |
1.6% |
|
|
USD |
Core Retail Sales (MoM) |
-0.4% |
0.1% |
-0.4% |
|
|
Foreign Securities Purchases |
26.11B |
13.50B |
10.16B |
||
|
USD |
Retail Sales (MoM) |
-0.5% |
0.2% |
-0.2% |
|
|
USD |
NY Empire State Manufacturing Index |
7.4 |
4.0 |
2.3 |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jul 17 |
8:30 |
GBP |
2.8% |
|
|
9:00 |
EUR |
-16.9 |
||
|
9:15 |
ALL |
G7 Meetings |
||
|
12:30 |
USD |
-0.3% |
||
|
13:00 |
USD |
25.6B |
||
|
13:15 |
USD |
-0.1% |
||
|
Jul 18 |
8:30 |
GBP |
8.1K |
|
|
8:30 |
GBP |
8.2% |
||
|
9:00 |
CHF |
-43.4 |
||
|
12:30 |
USD |
0.78M |
||
|
12:30 |
USD |
0.71M |
||
|
14:30 |
USD |
-4.7M |
||
|
Jul 19 |
6:00 |
CHF |
2.48B |
|
|
8:00 |
EUR |
4.6B |
||
|
8:30 |
GBP |
1.4% |
||
|
12:30 |
USD |
|||
|
14:00 |
USD |
4.55M |
||
|
14:00 |
USD |
-16.6 |
||
|
Jul 20 |
6:00 |
EUR |
-0.3% |
|
|
8:30 |
GBP |
15.6B |
Upcoming Government Bond Auctions
Date Time Country Auction
Jul 17 08:30 Spain Eur 2.5-3.5bn Jul 2013 (12M) & Dec 2013 (18M) T-bills
Jul 17 09:10 Greece Eur 1.25bn Oct 2012 (3M) T-bills
Jul 17 09:30 Belg Up to Eur 3.0bn Oct 2012 (3M) & Jul 2013 (12M) T-bills
Jul 17 10:00 EFSF Up to Eur 1.5bn Jan 2013 (6M) T-bills
Jul 18 09:30 Ger Eur 5.0bn 0.00% Jun 2014 Schatz
Jul 18 09:30 Port Eur 1.75-2.0bn new Jan 2013 (6M) & new Jul 2013 (12M)
Jul 19 00:30 Japan Auctions 5Y JGBs
Jul 19 08:30 Spain Eur 2.0-3.0bn 3.3% Oct 2014 Bono, 5.5% Jul 2017 &
Jul 19 08:50 France Eur 8.0-9.0bn 2.5% Jan 2015, 2.5% Jul 2016 & new 1.0%
Jul 19 09:30 UK GBP 1.75bn 3.75% Jul 2052 Gilt
Jul 19 09:50 France Eur 1.0-1.5bn 1.3% Jul 2019 OATi,
Jul 19 17:00 US USD 15.0bn 10Y Tips
Click here a current Gold Chart.
Originally posted here
