Gold Fundamental Analysis February 20, 2012, Forecast
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.
Friday February 17, 2012 Economic Reports actual v. forecast
|
SGD |
Singaporean Trade Balance |
1.26B |
7.61B |
|
|
EUR |
German PPI (MoM) |
0.6% |
0.2% |
-0.4% |
|
EUR |
Current Account |
2.0B |
2.3B |
-0.9B |
|
GBP |
Retail Sales (MoM) |
0.9% |
-0.2% |
0.6% |
|
BRL |
Brazilian Unemployment Rate |
5.5% |
5.4% |
4.7% |
|
Core CPI (MoM) |
0.2% |
0.1% |
-0.5% |
|
|
CAD |
CPI (MoM) |
0.4% |
0.3% |
-0.6% |
|
USD |
Core CPI (MoM) |
0.2% |
0.3% |
0.1% |
|
USD |
CPI (MoM) |
0.2% |
0.3% |
0.0% |
|
CAD |
Leading Indicators (MoM) |
0.7% |
0.6% |
0.7% |
Analysis and Recommendations:
Gold is trading 1724.55
The gold prices dropped $1724.55 an ounce during flat trading, as speculation continued over whether a Greek bailout will be agreed next week. Signals from Chancellor Merkel and also the ECB that a Greek deal might be close to materializing on Monday, investors were in more positive sentiments. Gold continued its descent as investors moved from safety to more risky assets.
The US currency markets were quiet as were those for commodities and stocks ahead of President’s Day in the US on Monday.
“A quiet session,” said one gold dealer this morning.
Originally posted here
