Analysis and Recommendations:

Gold plummeted on FOMC minutes and an address today by Chairman Bernanke, both saying the overall US economy was on the mend, slow, but mending nicely. With that there are little hopes of any QE or additional monetary intervention at this time. Investors are also less stressed now that the EU has finalized the bailout agreements with Greece. Gold is trading at 1637.25 down 56.95 joining most of the commodities trading lower today.

Gold should find a bit of support around the 1625 level, but will most likely break through, especially if there is a strong jobs report on Thursday.

Fed Chairman Bernanke today said again that the pace of the economic recovery has been frustratingly slow. Bernanke said that the condition of community banks is improving despite economic uncertainties. Profits of smaller banks were considerably higher in 2011 than in the previous year, nonperforming assets were lower, provisions for loan losses fell appreciably, and capital ratios improved, In his address Bernanke said. The Fed is trying to listen and understand small banks' concerns about regulation.

 width=645

Economic Reports and Events March 14, 2012 actual v. forecast

 

AUD

 
 
 

Westpac Consumer Sentiment 

-5.00%

 
 
 

4.20% 

 
 

 

JPY

 
 
 

BSI Large Manufacturing Conditions 

-7.3

 

1.3 

 

-6.1 

 
 

 

JPY

 
 
 

Industrial Production (MoM) 

1.9%

 

2.1% 

 

2.0% 

 
 

 

JPY

 
 
 

BoJ Monthly Report 

 

 
 
 
 
 
 

 

GBP

 
 
 

Average Earnings Index +Bonus 

1.4%

 

1.9% 

 

1.9% 

 
 

 

GBP

 
 
 

Claimant Count Change 

7.2K

 

6.0K 

 

7.0K 

 
 

 

EUR

 
 
 

CPI (YoY) 

2.7%

 

2.7% 

 

2.7% 

 
 

 

EUR

 
 
 

Industrial Production (MoM) 

0.2%

 

0.7% 

 

-1.1% 

 
 

 

EUR

 
 
 

Core CPI (YoY) 

1.5%

 

1.6% 

 

1.5% 

 
 

 

USD

 
 
 

Current Account 

-124.1B

 

-114.0B 

 

-108.0B 

 
 

 

USD

 
 
 

Import Price Index (MoM) 

0.4%

 

0.6% 

 

0.0% 

 
 

 

Economic Events Scheduled for March 15, 2012

09:30     CHF       Interest Rate Decision                                 0.00%                    0.00%

Swiss National Bank (SNB) governing board members come to a consensus on where to set the target range for the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.                      

10:00     EUR        ECB Monthly Report      

The European Central Bank's (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank's perspective.                                                        

 11:00    EUR        Employment Change (QoQ)                         -0.2%                     -0.1%    

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.      

13:30     USD       Core PPI (MoM)                                            0.2%                      0.4%                     

 13:30    USD       PPI (MoM)                                                     0.5%                      0.1%     

The Core Producer Price Index (PPI) measures the change in the selling price of goods and services sold by producers, excluding food and energy. The PPI measures price change from the perspective of the seller. When producers pay more for goods and services, they are more likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation.                

 13:30    USD      Initial Jobless Claims                                   356K                      362K     

13:30     USD      Continuing Jobless Claims                                                        3416K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

13:30     USD      NY Empire State Manufacturing Index         17.4                        19.5       

The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York State.

 14:00    USD      TIC Net Long-Term Transactions                  29.3B                     17.9B    

Treasury International Capital (TIC) Net Long-Term Transactions measures the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreign investors. Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation's securities.

15:00     USD       Philadelphia Fed Manufacturing Index       11.4                       10.2

The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district.

Government Bond Auction Schedule     (this week)

Mar 15  09:30  Spain  Obligacion auction

Mar 15  09:50  France  BTAN auction

Mar 15  10.30  UK  Auctions 4.5% 2042 conventional Gilt

Mar 15  10:50  France  OATi auction

Mar 15  16:00  US  Announces auction of 10Y TIPS on Mar 22

Just a heads up since gold is volatile and will react to most economic indicators we will begin to post the daily calendar with events that could affect the price of gold. The gold price is sensitive to a number of scheduled U.S. and Euro area macroeconomic announcements-including retail sales, non-farm payrolls, and inflation. Gold's high sensitivity to real interest rates and its unique role as a safe-haven and store of value typically leads to a counter-cyclical reaction to surprise news, in contrast to their commodities. It also shows a particularly high sensitivity to negative surprises that might lead financial investors to become more risk averse.  

These results have a number of implications. To reduce the uncertainty of the return on gold transactions, traders may wish to time their orders flow so as to avoid the release of information that has been shown to affect prices. For longer-term market participants, these results provide confirmation of the pro-cyclical bias of many commodities and gold's role as a safe-haven during periods of economic uncertainty.

Gold Pivot Points (Time Frame: 1 Day)

 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
1575.53
1604.82
1623.93
1653.22
1672.33
1701.62
1720.73

Fibonacci
1604.82
1623.31
1634.73
1653.22
1671.71
1683.13
1701.62

Camarilla
1629.74
1634.18
1638.61
1653.22
1647.49
1651.92
1656.36

Woodie's
-
1602.28
1618.85
1650.68
1667.25
1699.08
-

DeMark's
-
-
1662.78
1648.44
1614.38
-
-