Gold Fundamental Analysis February 14, 2012, Forecast

By FX Empire.com

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.

Mondays weeks major economic reports actual v. forecast.

JPY	GDP (QoQ)	-0.6%	-0.3%	1.4%
JPY	GDP Price Index (YoY)	-1.6%	-1.6%	-2.1%
JPY	Tertiary Industry Activity Index (MoM)	1.4%	0.8%	-0.6%
EUR		German WPI (MoM)	1.2%	0.4%	0.0%
CHF		PPI (MoM)	0.0%	0.2%	0.3%
EUR		German 6-Month Bubill Auction	0.08%	-0.01%
ALL		OECD Composite Leading Indicators	100.4	105.8	100.2

10:30 EUR Italian 10-Year BTP Auction

The figures displayed in the calendar represent the average yield on the Buoni del Tesoro Poliannuali or BTP auctioned.

Italian BTP bonds have maturities of five, ten, fifteen and thirty years. Governments issue treasuries to borrow money to cover the gap between the amount they receive in taxes and the amount they spend to refinance existing debt and/or to raise capital.

The yield on the BTP represents the return an investor will receive by holding the treasury for its entire duration. All bidders receive the same rate at the highest accepted bid.

Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at previous auctions of the same security

13:30 USD Core Retail Sales (MoM) 0.6% -0.2%

Core Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.

13:30 USD Import Price Index (MoM) 0.3% -0.1%

The Import Price Index measures the change in the price of imported goods and services purchased domestically.

13:30 USD Retail Sales (MoM) 0.8% 0.1%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

15:00 USD Treasury Secretary Geithner Speaks

U.S. Treasury Secretary Timothy Geithner (January 2009 – January 2013) is to speak. He speaks frequently on a broad range of subjects and his speeches are often used to signal policy shifts to the public and to foreign governments. ( This statement could have effect on the USD)

Analysis and Recommendations:

Gold is trading 1726.25 down slightly for the day from the opening of 1727.05. The story is the same here as for all the currency pairs. Greece, Greece and more Greece. Monday offered very little in the way of economic data so Greece was the center stage. As investors grew weary of the entire situation so did the markets, commodities and currencies are all closing the day pretty close to the opening. Tuesday should be a fascinating day with comments from the BoE and the US Treasury as well as many economic reports due out. Watch the fundamentals..

Originally posted here