Gold Fundamental Analysis April 19, 2012, Forecast

By FXEmpire.com

Analysis and Recommendations:

Gold is trading at 1643.05 down 8.05 towards the end of the day’s session. Continued worries over Spain and Italy have caused investors to move to the safety of the USD. Although gold seems to be hugging close to the 1650 price looking for direction.

Spot gold almost paused overnight and is currently hovering near the 1650 level. Spain sold 3.18 billion Euros ($4.2 billion) of debt yesterday, compared with the maximum target of 3 billion Euros. The IMF increased its estimate for global growth in 2012 to 3.5 percent from 3.3 percent and lifted its forecast for the U.S. expansion to 2.1 percent from 1.8 percent, easing concern that Europe’s debt crisis will stifle the recovery.

Economic Reports for April 18, 2012 actual v. forecast

AUD	MI Leading Index (MoM)	0.2%	0.6%
EUR	Current Account	-1.3B	5.0B	3.7B
EUR	Spanish House Price Index (YoY)	-7.20%	-5.90%	-6.80%
GBP	Average Earnings Index +Bonus	1.1%	1.3%	1.3%
GBP	Claimant Count Change	3.6K	7.0K	4.5K
GBP	MPC Meeting Minutes
GBP	Unemployment Rate	8.3%	8.4%	8.4%
CHF	ZEW Expectations	2.1	-8.0	0.0
EUR	German 2-Year Schatz Auction	0.140%	0.310%
EUR	Spanish Trade Balance	-3.75B	-3.90B	-3.65B
USD	MBA Mortgage Applications	6.9%	-2.4%
USD	Crude Oil Inventories	3.856M	1.363M	2.791M
CAD	BoC Monetary Policy Report
USD	Gasoline Inventories	-3.671M	-0.931M	-4.277M

Economic Events scheduled for April 19, 2012 that affect the European and American Markets

14:00:00 EUR Consumer Confidence -19 -20.3

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. A high reading is seen as positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

14:00:00 USD Existing Home Sales (MoM) 4.63M 4.59M

The Existing Home Sales, released by the National Association of Realtors provide an estimated value of housing market conditions. As the housing market is considered as a sensitive factor to the US economy, it generates some volatility for the USD. Generally speaking, a high reading is positive for the Dollar, while a low reading is negative.

14:00:00 USD Philadelphia Fed Man 12.2 12.5

The Philadelphia Fed Survey is a spread index of manufacturing conditions (movements of manufacturing) within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. It is also used as a forecast of The ISM Index. Generally, an above-the-expectations reading is seen as positive for the USD.

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.

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.

Originally posted here