Gold Fundamental Analysis May 9, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

Gold is the story of the day, while it hovers for most of April in the upper part of the 1650 price range, while markets were predicting a fall, but no action; gold drifted aimlessly looking for direction. With the negative US jobs report on Friday suddenly gold found a way to move and was slowly falling until today when it just tumbled to trade at 1603.75 after breaking below the 1600 price mid day.

Ambiguity existed in the market over the Euro Zone debt crisis after the French and Greece elections kept markets under pressure. The overall sentiments stayed vulnerable pressuring equities and commodities to move south. Spot gold declined for the second consecutive day tracking losses in euro. However, demand from India and China may provide cushion to the falling prices.

Today turned into risk aversion and a run to the USD and yen. Escalating tensions over Europe’s debt crisis with Greece being the matter of concerns has led to rise in risk aversion in the global markets today. On account of this, expect precious metals, base metals and crude oil prices to trade with a negative bias. Additionally, strength in the US dollar index will also exert further downside pressure on commodity prices.

Eco Data for May 8, 2012, a very thin day

GBP	RICS House Price Balance	-19%	-10%	-10%
AUD	Trade Balance	-1.59B	-1.40B	-0.75B
CAD	Housing Starts	245K	204K	215K

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

May 10	08:30	EUR	Dutch CPI (YoY)	2.40%	2.50%
09:00	EUR	ECB Monthly Report
09:30	GBP	Industrial Production (MoM)	-0.3%	0.4%
09:30	GBP	Manufacturing Production (MoM)	0.5%	-1.0%
09:30	GBP	Trade Balance	-9.6B	-8.8B
12:00	GBP	Interest Rate Decision	0.50%	0.50%
12:00	GBP	BOE QE Total	325B	325B
13:30	USD	IImport Price Index (MoM)	-0.2%	1.3%
13:30	USD	Trade Balance	-50.0B	-46.0B
13:30	USD	Initial Jobless Claims	369K	365K
13:30	USD	Continuing Jobless Claims	3278K	3276K
14:30	USD	Fed Chairman Bernanke Speaks
15:00	GBP	NIESR GDP Estimate	0.1%
19:00	USD	Federal Budget Balance	30.0B	-198.2B
May 11	00:01	GBP	Nationwide Consumer Confidence	53
07:00	EUR	German CPI (MoM)	0.1%	0.1%
09:30	GBP	PPI Input (MoM)	-1.0%	1.9%
10:00	EUR	Portuguese CPI (MoM)	1.20%
13:30	USD	Core PPI (MoM)	0.3%
13:30	USD	PPI (MoM)	0.0%
14:55	USD	Michigan Consumer Sentiment	76.4

Government Bond Auctions (this week)

Date Time Country

May 09 09:10 Sweden

May 09 09:30 Germany

May 09 09:30 Swiss

May 09 09:30 UK

May 09 14:30 Sweden

May 09 15:30 Italy

May 09 17:00 US

May 10 15:00 US

May 10 17:00 US

May 11 09:10 Italy BOT auction

May 11 10:00 Belgium

Click here a current Gold Chart.

Originally posted here