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.
15:00 USA Fed Chairman Bernanke Testifies
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.
Economic Data results prior trading day ( key better than expected worse than expected at forecast )
AUD MI Inflation Gauge (MoM) 0.2% 0.5%
AUD Retail Sales (MoM) -0.1% 0.2% 0.1%
AUD ANZ Job Advertisements (MoM) 6.00% -0.60%
IDR Indonesian GDP (YoY) 6.5% 6.5% 6.5%
TWD Taiwanese CPI (YoY) 2.4% 1.6% 2.0%
EUR Sentix Investor Confidence -11.1 -14.6 -21.1
EUR German Factory Orders (MoM) 1.7% 0.5% -4.9%
Gold Fundamental Analysis February 7, 2012, Forecast
Analysis and Recommendations:
Gold is trading down at 1724.85 dropping 15.15 from the high of 1740.45.
As the saying goes, USD up – Gold down and vice versa
The USD surged on Monday on worries about Greece.
News from Greece was not promising. Greece failed to agree on new austerity measures across political parties yesterday, a requirement for the proposed bailout to avoid default in March. There was some progress on bank recapitalization. There cannot be a new program for Greece unless the conditions of the troika are met,” Merkel said at a joint press conference here with Sarkozy, referring to the European Commission, the International Monetary Fund and the European Central Bank
A higher dollar is a negative for goldand other dollar-denominated commodities as it makes them more expensive for holders of other currencies.
As investors eyed the USD they lost interest in metals. Gold is still in solid territory. If the Greece crisis worsens or overflows to Portugal or Italian and Spain rates increase, we will see gold move back up the scale.
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