By FXEmpire.com

Analysis and Recommendations:

Gold fell today, to trade at 1661.75 down 2.45. The fall today was on low holiday volume and a higher USD, as investors decided to cash in and take profits. Gold bounced around for most of the session, first falling on a lackluster report from China in the early morning as Chinese PMI came in slightly below forecast and then moving up later in the day after the US ISM Manufacturing Index came in higher then expected.

With most of the markets closed for the holiday trading was thin along with news and eco data.

Gold ended April down, but it has been unable to sustain the price over the 1650 level and has had several shots at the 1700 price with no success. Most economists are expecting gold to fall to 1620 in the near term.

Economic Reports for May 1, 2012 actual v. forecast

KRW

South Korean CPI (YoY)

2.5%

2.8%

2.6%

KRW

South Korean CPI (MoM)

0.0%

0.3%

-0.1%

CNY

Chinese Manufacturing PMI

53.30

53.60

53.10

AUD

House Price Index (QoQ)

-1.10%

-0.50%

-0.70%

AUD

Interest Rate Decision

3.75%

4.00%

4.25%

AUD

RBA Rate Statement

INR

Indian Trade Balance

-13.9B

-13.9B

-15.2B

DKK

Danish Retail Sales (YoY)

1.2%

-0.2%

-0.2%

GBP

Manufacturing PMI

50.5

51.4

51.9

USD

ISM Manufacturing Index

54.8

53.0

53.4

Economic Events for May 2, 2012

12:15 USD ADP Employment Change 209K

The Employment Change released by the Automatic Data Processing, Inc is a measure of the change in the number of employed people in the US Generally speaking; a rise in this indicator has positive implications for consumer spending which stimulates economic growth.

14:00 USD Factory Orders 1.3%

The Factory orders released by the US Census Bureau is a measure of the total orders of durable and non durable goods such as shipments (sales), inventories and orders at the manufacturing level which can offer insight into inflation and growth in the manufacturing sector.

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 affect 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.

Click here a current Gold Chart.

Originally posted here