Gold Weekly Fundamental Analysis April 23-27, 2012, Forecast

By FXEmpire.com

Introduction: Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets.

• Gold reacts to uncertainty in the markets
• Gold reacts to the Federal Reserve and monetary policy
• A drop in major currencies can indicate a run into gold.
• Remember investors tend to take profit from gold so watch for trading opportunities when investors are taking profits, not moving out of the markets.

Analysis and Recommendations:

Gold had a week of ups and downs, reacting to euro worries and poor eco data out of the US. Gold ended the week at 1643.65 after starting out the week at 1653.85. Gold has been looking for direction all week and has just hugged the 1650 price most of the week

As the weekends, worries over Euro Zone debt and economic growth in the US and China continue to grip commodities and were seen trading in a very tight range waiting for fresh cues for further directional moves. In a lackluster trading, spot gold held steady. Base metals in LME traded mostly flat as investors remained cautious after weak economic indicators from the U.S. Though, successful French and Spanish bond auction allayed concerns over Euro Zone’s deteriorating financial health to some extent. Unexpected rise in German business climate assessed by Ifo lifted the sentiments too. LME copper managed to hang above $8000 a ton. In tandem with the international market, movements in MCX base metal complex and bullions were dreary. Crude oil rose for the first time in three days supported by positive German data. Meanwhile, G-20 finance ministers and central bankers are to meet in Washington later today. The Indian rupee was seen bouncing off a 3-month low it hit during previous session at 52.11 up 0.17 percent

Market emotions remained rather subdued in the wake of persistent debt concerns in the Euro region in spite of a strong German business sentiment. Looking into the evening, no major economic data is slated for release. The ongoing G-20 finance minister’s meet in Washington would be the key event markets would be looking up to take cues from. With Chinese economy going through a lean patch, possible Chinese Central bank liquidity action in the coming days could be a marquee event and have a real impact on the commodities.

Historical

High: 1916.20

Low: 1321.10

Economic Events: (GMT)

EUR	Industrial New Orders (MoM)	-0.5%	-2.3%
USD	New Home Sales	320K	313K
USD	CB Consumer Confidence	70.3	70.8
GBP	GDP (YoY)	0.3%	0.5%
GBP	CBI Industrial Trends Orders	-20	-8
USD	Durable Goods Orders (MoM)	-1.5%	2.4%
USD	Core Durable Goods Orders (MoM)	0.5%	1.8%
USD	Interest Rate Decision
GBP	Nationwide Consumer Confidence	44
GBP	CBI Distributive Trades Survey	-4
CHF	KOF Leading Indicators	0.26	0.08

Click here a current Gold Chart.

Originally posted here