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 closed out the week at 1645.50 moving back up after the disappointing jobs data in the US.
The unexpectedly low number of new jobs has once again brought the idea of additional Fed accommodation to the minds of investors who ran the price back up in Friday’s session.
Gold is closing the week lower in the 1645 range, for the past 6 weeks the price of gold as alternated between ups and downs with no distinct trend or direction. The sideways action finds the metal consolidating at a 3.5 year bullish trend with support at 1632. This might be the end of this run for gold.
It all depends on Fed action and the strength of the USD and news from Europe. Gold will be very sensitive to fundamentals for the next week.
Major Economic Events for the past week actual v. forecast
|
AUD |
Interest Rate Decision |
3.75% |
4.00% |
4.25% |
|
USD |
ISM Manufacturing Index |
54.8 |
53.0 |
53.4 |
|
USD |
ADP Nonfarm Employment Change |
119K |
177K |
201K |
|
NZD |
Unemployment Rate |
6.7% |
6.3% |
6.4% |
|
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
USD |
Initial Jobless Claims |
365K |
380K |
392K |
|
USD |
Nonfarm Payrolls |
115K |
170K |
154K |
|
USD |
Unemployment Rate |
8.1% |
8.2% |
8.2% |
|
Ivey PMI |
52.7 |
61.0 |
63.5 |
Historical
High: 1916.20
Low: 1321.10
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
May 7 |
7:00 |
CHF |
Foreign Currency Reserves |
237.5B |
|
7:15 |
CHF |
CPI m/m |
0.6% |
|
|
May 10 |
8:30 |
GBP |
Manufacturing Production m/m |
-1.0% |
|
11:00 |
GBP |
Official Bank Rate |
0.50% |
|
|
12:30 |
USD |
Trade Balance |
-46.0B |
|
|
12:30 |
USD |
Unemployment Claims |
365K |
|
|
May 11 |
8:30 |
GBP |
PPI Input m/m |
1.9% |
|
12:30 |
USD |
PPI m/m |
0.0% |
|
|
13:55 |
USD |
Prelim UoM Consumer Sentiment |
76.4 |
Originally posted here
