By FXEmpire.com
Analysis and Recommendations:
Gold is trading post release at 1593.65 tumbling over 12.00 in just minutes after the release.
Traders are more or less sitting on the side at this time, waiting for the big event of the day, the FOMC statement due at 2:15 US time from Fed Chairman Bernanke. Regardless of expectation and actions, the markets will react to the statement. We have decided to hold off our daily Fundamental Analysis until after the statement, so that we can add in our expectations and market reactions to Mr. Bernanke’s decisions. Below you will find our daily analysis prior to the release. Followed by an update noted as post release, we will also try to give you up to date pricing as the markets react.
Uncertainty and caution prevailed in the market ahead of the upcoming crucial economic events. Investors are anxiously waiting for the course of action to be adopted by the US Federal Reserve and European Central Bank to support their respective economies. Bullion traded mostly steady as investors choose to stay away ahead of the leading central bank’s policy decision which is likely to provide fresh directions to the market. Spot gold, hardly changed, was trading above $1609 an ounce while spot silver moves were mostly steady with a mild negative bias.
Meanwhile, lackluster manufacturing data from China weighed on the base metals. Base metals declined in LME with lead and zinc leading the fall. LME copper dropped to its lowest in almost a week on worries over demand. The official Chinese manufacturing PMI showed that the manufacturing activity hardly grew in July, fuelling further worries over the slowing economic activity in the world’s second largest economy.
Gold is trading prior to the FOMC statement at 1605.45
Chairman Bernanke and associates today downgraded their view on the economy but otherwise didn’t make any changes to its key interest rate, low-rate pledge, or asset-buying plans. The FOMC now says “economic activity decelerated somewhat over the first half of the year,” vs. a prior description of saying the “economy has been expanding moderately.” The decision not to extend its low-rate pledge beyond the current “late 2014? was unexpected. The Fed kept its federal funds rate target between 0% and 0.25% and said it “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.” This was the bare minimum that the markets were expecting, leaving open anticipation for stimulus in September. Overall markets were disappointed.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthlyanalysis 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
Economic Events: (GMT)
Economic Data August 1, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Aug. 01 |
KRW |
South Korean CPI (YoY) |
1.5% |
2.0% |
2.2% |
|
KRW |
South Korean CPI (MoM) |
-0.2% |
0.3% |
-0.1% |
|
|
CNY |
Chinese Manufacturing PMI |
50.10 |
50.30 |
50.20 |
|
|
AUD |
House Price Index (QoQ) |
0.50% |
-0.50% |
-0.10% |
|
|
CNY |
Chinese HSBC Manufacturing PMI |
49.50 |
49.50 |
||
|
GBP |
Nationwide HPI (MoM) |
-0.7% |
-0.1% |
-0.6% |
|
|
EUR |
Italian Manufacturing PMI |
44.30 |
44.20 |
44.60 |
|
|
EUR |
French Manufacturing PMI |
43.4 |
43.6 |
43.6 |
|
|
EUR |
German Manufacturing PMI |
43.0 |
43.3 |
43.3 |
|
|
EUR |
Manufacturing PMI |
44.0 |
44.1 |
44.1 |
|
|
GBP |
Manufacturing PMI |
45.4 |
48.7 |
48.4 |
|
|
USD |
ADP Nonfarm Employment Change |
163K |
120K |
176K |
Upcoming Economic Events that affect the USD
|
Date |
Time |
Currency |
Event |
Forecast |
Previous |
|
Aug 2 |
12:30 |
USD |
Unemployment Claims |
353K |
|
|
14:00 |
USD |
Factory Orders m/m |
0.7% |
||
|
Aug 3 |
12:30 |
USD |
Non-Farm Employment Change |
80K |
|
|
12:30 |
USD |
Unemployment Rate |
8.2% |
||
|
12:30 |
USD |
Average Hourly Earnings m/m |
0.3% |
||
|
14:00 |
USD |
ISM Non-Manufacturing PMI |
52.1 |
Government Bond Auctions
Date Time Country
Aug 02 08:30 Spain
Aug 06 09:10 Norway
Aug 07 00:30 Japan
Aug 07 09:15 Austria
Aug 07 14:30 UK
Aug 07 17:00 US
Aug 08 09:30 Germany
Aug 08 10:00 Norway
Aug 08 15:30 Italy
Aug 08 17:00 US
Aug 09 15:30 Italy
Aug 09 17:00 US
Aug 10 10:00 Belgium
Click here a current Gold Chart.
Originally posted here
