Gold Fundamental Analysis June 5, 2012, Forecast

Analysis and Recommendations:

Gold has spent the day holding the 1620 mark currently at 1621.15 down 0.95. Gold held steady near $1621 an ounce, clinging to its 4 percent gains from the last session. Gloomy US job outlook, deepening eurozone crisis and weak Chinese economic growth prompted investors to invest in bullion due to its safe haven appeal. However as per new CFTC data, net long positions in gold futures and option inched up in the last week after declining for  the three straight week loss.

Gold prices would have taken a pause at the Globex skidding 0.28% from the weekly closing while, the Asian shares slid as investors gathered worries from the terrible jobs data released last Friday, and a weak Chinese PMI pressurized the stocks in early morning. Euro as well knocked down once again against the dollar after Spain sought after efforts to shield the Euro area banks from default. Going ahead continued concerns are likely to weigh onto the riskier assets but disordered global financial markets may draw some refuge into the metal. Market will be eyeing the meeting between German chancellor and EU commission president in advance of a late June European summit to back ideas for banking recapitalization to protect the cash instability.

Also, market will be cautious for alerts on Greek commitments updates for a secured berth in the Euro zone. Although Euro is still poise to a downside risk, market performance showed gold has accumulated highest volume last week as compared to the past 10 weeks. And, lowest US 10-year bond yield clearly indicates an unusual break up in Gold-dollar relationship (inverse), attracting refuge demand from the anemic market sentiment. From the economic data front, the Euro zone investor confidence is likely to remain weak while the producer price may reduce a bit. While the former indicates a weaker Euro, slight support may come from the later. Gold therefore is although expected to be under pressure, a flight to safety may keep it buoyed as a guard against portfolio attrition. Hence, we recommend staying long for the metal from lower levels.  

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.

Economic Data DATE, 2012 actual v. forecast (virtually no eco data in Europe or the US today)

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jun. 04

 

JPY

 

 

 

Monetary Base (YoY) 

2.4%

 

0.2% 

 

-0.3% 

 

 

 

 

AUD

 

 

 

MI Inflation Gauge (MoM) 

0.0%

 

 

 

0.3% 

 

 

 

 

AUD

 

 

 

Company Gross Profits (QoQ) 

-4.0%

 

-2.0% 

 

-6.5% 

 

 

 

 

AUD

 

 

 

ANZ Job Advertisements (MoM) 

-2.40%

 

 

 

-0.80% 

   

 

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

Date

Time

Currency

 

Forecast

Previous

 

Jun 5

9:00

EUR

Retail Sales m/m

 

0.3%

10:00

EUR

German Factory Orders m/m

 

2.2%

14:00

USD

ISM Non-Manufacturing PMI

 

53.5

 

Jun 6

6th-8th

GBP

Halifax HPI m/m

   

8:30

GBP

Construction PMI

 

55.8

10:00

EUR

German Industrial Production m/m

 

2.8%

11:45

EUR

Minimum Bid Rate

1.00%

1.00%

12:30

EUR

ECB Press Conference

   

12:30

USD

Revised Nonfarm Productivity q/q

 

-0.5%

14:30

USD

Crude Oil Inventories

   

18:00

USD

Beige Book

   

23:01

GBP

BRC Retail Sales Monitor y/y

 

-3.3%

 

Jun 7

7:00

CHF

Foreign Currency Reserves

 

235.6B

7:15

CHF

CPI m/m

 

0.1%

8:30

GBP

Services PMI

 

53.3

TBD

EUR

French 10-y Bond Auction

   

11:00

GBP

Asset Purchase Facility

 

325B

11:00

GBP

Official Bank Rate

0.50%

0.50%

TBD

GBP

MPC Rate Statement

   

12:30

USD

Unemployment Claims

 

383K

14:00

USD

Fed Chairman Bernanke Testifies

   

 

Jun 8

8:30

GBP

PPI Input m/m

 

-1.5%

8:30

GBP

Consumer Inflation Expectations

 

3.5%

TBD

GBP

10-y Bond Auction

   

12:30

USD

Trade Balance

 

-51.8B

14:00

USD

Fed Chairman Bernanke Testifies

   

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