By FX Empire.com

Gold Fundamental Analysis February 27, 2012, Forecast

Economic Events: (GMT)

Monday will be a relatively quiet day for economic data

07:00 EUR GfK German Consumer Climate

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

10:30 CHF KOF Leading Indicators

The KOF Leading Indicators Index is designed to predict the direction of the economy over the following six months. The index is a composite reading of 12 economic indicators related to banking confidence, production, new orders, consumer confidence and housing.

A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

11:00 GBP CBI Distributive Trades Survey

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease.

A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

15:00 USD Pending Home Sales (MoM)

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish 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 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.

Analysis and Recommendations:

Gold is trading declined Friday, taking a pause in a week set to bring more than 3% in gains. Gold for April delivery declined 8.15, or 0.5%, to $1778.15. Gold on Thursday settled at its highest level since Nov. 11, buoyed by a lower U.S. dollar and fears of inflation stoked by rising oil and retail gasoline prices.

Gold has gained nearly $53 per ounce, or 3.1%, on the week so far.

The sale of new single-family homes in the U.S. fell slightly in January, but only because sales in December were revised higher. Taken together, sales in those two months were the strongest in a year, a good sign for a market that’s been in a deep slump since the 2007-2009 recessions.

Consumer sentiment rose in February to the highest level in a year on strong awareness of improving employment, according to a gauge released Friday by the University of Michigan

Consumer sentiment rose to 75.3 in February from 75 in January, achieving a sixth month of improvement. Consumers’ expectations rose to 70.3 from 69.1, while their views on current conditions declined to 83 from 84.2.

February 24, 2012 Economic Results actual v. forecast

SGD Singaporean Industrial Production (YoY)

-8.8%

-1.6%

12.6%

EUR

 German GDP (QoQ)

-0.2%

-0.2%

-0.2%

EUR

 French Consumer Confidence

82

82

81

EUR

 Spanish PPI (YoY)

3.6%

4.7%

5.2%

EUR

 Italian Retail Sales (MoM)

-1.1%

-0.2%

-0.7%

GBP

 Business Investment (QoQ)

-5.6%

-0.4%

1.0%

GBP

 GDP (QoQ)

-0.2%

-0.2%

-0.2%

GBP

 Index of Services

0.0%

0.2%

0.2%

Sovereign Bond Auction Schedule

Feb 27 12:00 Norway Details bond auction on May 05

Feb 28 01:30 Japan Auctions 2Y JGBs

Feb 28 10:10 Italy BTP/CCTeu auction

Feb 28 10:30 Belgium Auctions 3 & 6M T-bills

Feb 28 15:30 UK Details gilt auctions on Mar 06 & Mar 07

Feb 29 10:10 Sweden Auctions T-bills

Feb 29 10:30 Germany Eur 4.0bn 2.0% Jan 2022 Bund

Feb 29 15:30 Sweden Details nominal bond auction on Mar 07

Mar 01 09:30 Spain Bono auction

Mar 01 09:50 France OAT auction

Mar 01 10.30 UK Auctions 4.0% 2022 conventional Gilt

Mar 01 09:30 Spain Bono auction

Mar 01 09:50 France OAT auction

Mar 01 10.30 UK Auctions 4.0% 2022 conventional Gilt

Originally posted here