Gold Fundamental Analysis February 21, 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.
The markets are closed today for the Presidents Day Holiday
Brussels: The Eurozone Ministers continue in meetings with no decision at this time.
German Chancellor Angela Merkel’s center-right CDU/CSU-FDP government coalition on Sunday agreed with the center-left opposition parties to jointly nominate former East German human rights activist Joachim Gauck to become the country’s next president. Gauck is not a member of a political party. The role of the German president is mainly ceremonial.
Greek bailout will “likely” get final approval in the week starting March 12, according to statement on Finnish Finance Ministry website. “The final approval for activating the EFSF guarantees and completing the PSI operation are conditional on the Troika and the eurogroup deeming the PSI as successful and Greece to have fulfilled its commitments”
China’s VP Xi Jinping, in a speech in Dublin last night, said his country is considering more support for Europe. The official said “We are considering more involvement in helping address the European debt issue through EFSF, ESM and other channels” adding “China supports the European integration process, the euro, by purchasing European bonds.”
In Italy Dec industrial orders rose 5.5% in seasonally-adjusted m/m terms as a result of increased domestic and foreign orders. It was the steepest gain since march 2011, ISTAT said. On the year, unadjusted industrial orders fell 4.3%, down from -0.7% y/y in November. -Dec seas. adjusted m/m domestic orders +5.8%; foreign orders +5.1% m/m .
Italian Industrial orders for Dec +5.5%m/m from +0.2% in Nov. Unadjusted -4.3% y/y Dec sales sa +3.4%m/m from +0.1$ in Nov Workday adjusted +5.6% y/y Improvement, with increases in domestic and foreign orders with the largest gain since March 2011.
Italian PM Monti say that his government is sticking to 2013 balanced budget target
In France February manufacturing sentiment 92 vs January 92 (91)also France manufacturing morale came in at forecast in MNI
UK Gross mortgage lending fell 14.1% on the month in January but was up 10.2% on a year ago, according to Council of Mortgage Lenders data. As the CML figures are not seasonally adjusted it said the monthly fall in January was not unexpected. The 10.2% rise on the year.
Analysis and Recommendations:
Gold is trading 1735.45 up 9.55 clawing back some of the losses of late last week. Combining the old adage of USD down Gold Up and the additional geopolitical turmoil coming from the news that Iran had halted oil shipments to EU nations, pushed gold back up today. With the hopes of a final agreement with Greece and the news from China and the reduction of bank reserves, all together gave gold the push upwards today.
Monday February 20, 2012 Economic Reports actual v. forecast
US markets closed today for holiday
|
Actual |
Forecast |
Previous |
||
|
GBP |
Rightmove House Price Index (MoM) |
4.1% |
-0.8% |
|
|
THB |
Thai GDP (YoY) |
-9.0% |
-4.3% |
3.7% |
|
EUR |
French Business Survey |
92 |
92 |
92 |
|
EUR |
Italian Industrial New Orders (MoM) |
5.5% |
-0.5% |
0.2% |
|
RUB |
Russian Retail Sales (YoY) |
6.8% |
10.2% |
9.5% |
|
RUB |
Russian Unemployment Rate |
6.6% |
6.3% |
6.1% |
Originally posted here
