By FXEmpire.com

Analysis and Recommendations:

Gold reversed course today adding 38.75 to trade at 1574.85

Gold futures extended the early gains tracking the bounce back in the global gold prices on bargain buying and strong euro.

The Federal Reserve signaled further monetary easing remains an option to protect the U.S. economy from the danger that lawmakers will fail to reach agreement on the budget or Europe’s debt woes worsen. Several members of the Federal Open Market Committee said new actions could be necessary if the economy loses momentum or downside risks to the forecast became great enough, according to minutes of the Federal Open Market Committee’s April meeting released yesterday in Washington. Despite its recovery, it remains vulnerable to a further drop after its longest stretch of losses in nearly five months. The June CBOT Gold quotes at USD 1548.4, up 11.8 USD.

Commodities and equities took a breather and was seen recuperating from its recent slump though persistent worries over euro zone debt crisis and political uncertainty in Greece made investors remain guarded. Rebound in euro from a four month low levels earlier today lifted the sentiments. However, by afternoon euro was seen paring the earlier gains. Spot gold rebounded from a four and a half month low, gaining around one per cent. Steep declines might have probably attracted bargain hunting. In the MCX, gold rose, tracking gains in the global markets.

Meanwhile, gold demand from China rose to a record high during the first quarter and toppled India as the biggest bullion market according to World Gold Council. Base metals rose in LME and Shanghai with copper gaining more than one per cent, snapping its four day fall. Crude oil in Nymex rebound from a six month low levels on expectation that the inventory glut may ease at the main storage hub in the U.S. Also, better than expected expansion in Japanese economy during the first quarter of this year lifted the prices too. Earlier, Spanish bond auction saw borrowing cost inching higher amid growing concerns over Greece’s future in the European Union, further raising concern bars for investors.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports

Economic Data May 17, 2012 actual v. forecast

May 17

JPY

GDP (QoQ)

1.0%

0.9%

-0.2%

JPY

GDP Price Index (YoY)

-1.2%

-1.4%

-1.8%

JPY

Industrial Production (MoM)

1.3%

1.1%

1.0%

CAD

Foreign Securities Purchases

-2.08B

9.34B

12.54B

USD

Initial Jobless Claims

370K

365K

370K

CAD

Wholesale Sales (MoM)

0.4%

0.4%

1.5%

USD

Continuing Jobless Claims

3265K

3235K

3247K

USD

Philadelphia Fed Manufacturing Index

-5.8

10.0

8.5

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

The calendar for the end of the week is very thin. There should be little eco data that will affect the markets

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Originally posted here