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.

Weekly Analysis and Recommendations:

Gold ended the down for the week but up in Friday’s trading to close out a tumultuous week at 1579.25.

The political turmoil in Greece, France and Spain had investors running for safety. The market was in risk aversion mode all week.

Gold traders are the least bullish in five weeks after the metal erased almost all of this year’s gains, as political turmoil in Europe and mounting optimism about the U.S. economy drives investors to favor the dollar. U.S. gold for June delivery fell $8.20 to $1,587.30 an ounce. Spot Gold is currently trading at$1858.65. MCX Gold June is currently at `28409, it is trading down by `37 points for the day.

Hopes for QE from the US Fed coupled with negative sentiment in Europe, and weak eco data, allowed gold to fall this week while the USD climbed to recent record highs.

Gold is expected to make a small rebound on Monday to touch close to the 1600 level before falling again. There is a lack of supporting eco data in the early part of the week and the chance of anything positive coming out of Europe is little to none.

Historical

High: 1916.20

Low: 1321.10

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

May 14

07:00

EUR

Finnish CPI (YoY)

2.90%

08:15

CHF

PPI (MoM)

0.3%

08:30

EUR

Dutch Retail Sales (YoY)

0.90%

10:00

EUR

Industrial Production (MoM)

-0.2%

0.5%

May 15

06:30

EUR

French CPI (MoM)

0.8%

07:45

EUR

French Non-Farm Payrolls (QoQ)

-0.1%

09:30

GBP

Trade Balance

-8.8B

May 16

09:30

GBP

Average Earnings Index +Bonus

1.1%

09:30

GBP

Claimant Count Change

3.6K

10:00

EUR

CPI (YoY)

2.6%

2.6%

10:00

EUR

Core CPI (YoY)

1.6%

11:00

EUR

Portuguese Unemployment Rate

14.00%

Originally posted here