It is a crucial week, in the coming four days we could know the truth if whether the US economy is really in a recession or heading into one, with the non-farm payroll reading released on Friday with expectations to see a serious shrinkage in the employment, as the US companies are laying off more and more employee's. The banking system is putting more restrictions; no money is given out with 100% collaterals, this is contributing in stalling the US market, were continues fall in the US financial sector is pointing out a clear bold phrase The United States is in Recession. Confidence, Spending two major player in the economy got affected also, the layoffs in the US economy is preventing people from spending, all citizens are afraid to spend money as they expect terminations from were they work, if those two basis of the economy keeps on heading to the down side the feds will struggle much to revive them once again, and for your knowledge dear reading its not easy.
Yet last week we saw the resilience of the US dollar, were investors' took the unrevised reading of the GDP in the fourth quarter of 2007 as a positive sign, holding up, but the problem is this quarter because the first quarter of 2008, with all the weak data plus the slipping confidence came out to surface in those months.
The shiny metal last week, began on regaining some of the losses that it faced in the second week of March were it recorded a high of $1030 per ounce, so the gold ingots closed in NY session on Friday at $930.80, not breaching the high that it recorded earlier in the week at $954.70 per ounce. The demand on the bullion would increase this week if the prospect of a sever shrinkage in the Employment sector, were investors would head to the bullion as a hedging technique from a fluctuations to the US dollar.
On the other hand, the oil whom is connected with the gold with a proportional relationship is weakening; with the recession fear and the slowing in the manufacturing sector in the United States is curbing down the demand on the black metal, as we all know the US is considered the largest oil consumer; plus the oil have been affected by the cut down in the supply after a base pipeline got blown. If the signs of recession is gets proven this week the oil wont play a major role in boosting the bullion, were they might let go the proportional relationship between them this week.
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