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 traded down all week following the hands off mode of the markets. Gold eventually hit a low of 1526.95 and turned around on Friday to move upwards to end the week at 1590.15
Gold rebounded on heavy trades yesterday, reversing the previous session’s losses, and posted its biggest daily gain in more than three months. Technical buying, option expiry in COMEX futures and weak US manufacturing figures prompted bargain hunting in gold despite the Euro remaining weak. Rating agency Moody’s, downgrading of 16 Spanish banks and Fitch’s downgrading of Greek sovereign rating yesterday, weighed on bullion prices too. The Euro continued its weakness, floating near a four month low against the dollar, owing to Greece’s possible exit from the Euro zone and concerns over Spanish banks. At the same time physical demand for bullion seems lackluster, due to heavy selling from investors and speculators.
Global market sentiments are mixed as we approach the end of the week. Heightening European economic concerns along with strength in the US Dollar Index is expected to act as a negative factor for dollar-denominated commodities.
But Gold is expected to witness upside today as rise in economic woes could lead to revival in demand for gold as a safe-haven investment. In the near-term too, gold is expected to trade on a positive note.
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
Major Economic Events for the week of May 14-18 actual v. forecast for Euro, GPB, and the Franc
|
CHF |
PPI (MoM) |
-0.1% |
0.3% |
0.3% |
|
EUR |
Industrial Production (MoM) |
-0.3% |
0.4% |
0.8% |
|
GBP |
Trade Balance |
-8.6B |
-8.4B |
-8.6B |
|
EUR |
GDP (QoQ) |
0.0% |
-0.2% |
-0.3% |
|
EUR |
ZEW Economic Sentiment |
-2.4 |
11.7 |
13.1 |
|
GBP |
Claimant Count Change |
-13.7K |
5.0K |
-5.4K |
|
GBP |
Average Earnings Index +Bonus |
0.6% |
1.0% |
1.1% |
|
EUR |
Core CPI (YoY) |
1.6% |
1.5% |
1.6% |
|
EUR |
CPI (YoY) |
2.6% |
2.6% |
2.6% |
Historical
High: 1916.20
Low: 1321.10
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
May 21 |
5:45 |
CHF |
SECO Consumer Climate |
-18 |
-19 |
|
May 22 |
8:30 |
GBP |
CPI y/y |
3.5% |
|
|
8:30 |
GBP |
Public Sector Net Borrowing |
15.9B |
||
|
8:30 |
GBP |
RPI y/y |
3.6% |
||
|
TBD |
GBP |
BOE Inflation Letter |
|||
|
14:00 |
USD |
Existing Home Sales |
4.48M |
||
|
May 23 |
8:00 |
EUR |
Current Account |
-1.3B |
|
|
8:30 |
GBP |
MPC Meeting Minutes |
0-0-9 |
||
|
TBD |
EUR |
Industrial New Orders m/m |
-1.2% |
||
|
10:00 |
GBP |
CBI Industrial Order Expectations |
-8 |
||
|
TBD |
GBP |
Inflation Report Hearings |
|||
|
14:00 |
USD |
New Home Sales |
328K |
||
|
14:30 |
USD |
Crude Oil Inventories |
|||
|
May 24 |
6:00 |
CHF |
Trade Balance |
1.69B |
|
|
7:00 |
EUR |
French Flash Manufacturing PMI |
46.9 |
||
|
7:00 |
EUR |
French Flash Services PMI |
45.2 |
||
|
7:30 |
EUR |
German Flash Manufacturing PMI |
46.2 |
||
|
7:30 |
EUR |
German Flash Services PMI |
52.2 |
||
|
8:00 |
EUR |
German Ifo Business Climate |
109.9 |
||
|
8:00 |
EUR |
Flash Manufacturing PMI |
45.9 |
||
|
8:00 |
EUR |
Flash Services PMI |
46.9 |
||
|
8:30 |
GBP |
Retail Sales m/m |
1.8% |
||
|
8:30 |
GBP |
Revised GDP q/q |
-0.2% |
||
|
8:30 |
GBP |
BBA Mortgage Approvals |
31.9K |
||
|
8:30 |
GBP |
Prelim Business Investment q/q |
-3.3% |
||
|
12:30 |
USD |
Unemployment Claims |
|||
|
12:30 |
USD |
Durable Goods Orders m/m |
-4.0% |
||
|
13:00 |
EUR |
Belgium NBB Business Climate |
-10.7 |
Click here a current Gold Chart.
Originally posted here
