Gold Fundamental Analysis March 20, 2012, Forecast

  on March 19 2012 6:04 PM

Analysis and Recommendations:

Gold closed up +6.55 at 1662.35, after some initial weakness, gold moved up most of the day, as the USD fell against all major trading partners. Investors were leaving the USD for more risk securities, pushing up most commodities and equities.

Bargain hunters were buying gold as it had plunged towards the end of last week, they are hoping for one more hoorah, before gold begins to move down.

Today, Swiss bank UBS Monday downgraded its one- and three-month forecasts for gold, citing expectations of a sustainable recovery in the global economy, particularly in the U.S. We see gold now in a challenging environment, precious metals strategist Edel Tully said.

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Economic Data for March 19, 2012 actual v. forecast

 

GBP

 
 
 

Rightmove House Price Index (MoM) 

1.6%

 
 
 

4.1% 

 
 

 

AUD

 
 
 

RBA Governor Stevens Speaks 

 

 
 
 
 
 
 

 

EUR

 
 
 

Current Account 

4.5B

 

4.3B 

 

3.4B 

 
 

 

EUR

 
 
 

Italian Industrial New Orders (MoM) 

-7.4%

 

-3.8% 

 

5.2% 

 
 

 

CLP

 
 
 

Chilean GDP (YoY) 

4.5%

 

4.2% 

 

3.7% 

 
 

 

CAD

 
 
 

Wholesale Sales (MoM) 

-1.0%

 

0.4% 

 

1.0% 

 
 

 

USD

 
 
 

NAHB Housing Market Index 

28

 

30 

 

28 

 
 

 

USD

 
 
 

3-Month Bill Auction 

0.095%

 
 
 

0.095% 

 
 

 

Economic Events Scheduled for March 20, 2012 Europe and Americas

09:15     CHF         Industrial Production (QoQ)

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.                                                                                       

10:30     GBP      Core CPI (YoY)

10:30     GBP      CPI (YoY)

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.                                       

12:00     GBP      CBI Industrial Trends Orders

The Confederation of British Industry (CBI) Industrial Trends Orders measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions. A level above zero indicates order volume is expected to increase; a level below zero indicates expectations are for lower volumes. The reading is compiled from a survey of about 550 manufacturers.                                                                                                       

13:30     USD      Building Permits            

Building Permits measures the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.                      

13:30     USD      Housing Starts

Housing starts measures the change in the annualized number of new residential buildings that began construction during the reported month. It is a leading indicator of strength in the housing sector.

 

Government Bond Auctions (this week)

Mar 21  10:10  Sweden  Nominal bond auction

Mar 21  10:30  Germany  Eur 5.0bn Mar 2014 Schatz

Mar 21  10:30  Portugal  Eur 0.75-1.0bn 4 & 6M T-bills

Mar 22  10:10  Sweden  I/L bond auction

Mar 22  10.30  UK  Auctions 0.625% 2042 I/L Gilt

Mar 22  15:00  US

Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar

28 & 7Y Notes on Mar 29

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
1635.07
1643.38
1653.27
1661.58
1671.47
1679.78
1689.67

Fibonacci
1643.38
1650.34
1654.63
1661.58
1668.54
1672.83
1679.78

Camarilla
1658.15
1659.81
1661.48
1661.58
1664.82
1666.49
1668.16

Woodie's
-
1643.78
1654.05
1661.98
1672.25
1680.18
-

DeMark's
-
-
1675.63
1663.66
1657.43
-
-

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