Analysis and Recommendations:

Gold dropped to 1704.25  just ahead of the 100 day MA which sits at 1694 and should hold some technical support., extending a selloff started in the last week and continued in electronic trading over the weekend, following a weekly loss of 3.7%, as negative data from Europe, China and the U.S. weighed in.

The Institute of Supply Management said its non-manufacturing PMI climbed to 57.3 in February from a reading of 56.8 the previous month. Economists had expected the index to decline to 56.1.

Another report showed that U.S. factory orders fell, but at a slower than forecast rate in January, declining by a seasonally adjusted 1.0%, compared to forecasts for a 1.3% slide.

Monday March 5, 2012 Economic Data Release actual v. forecast

 

AUD

 
 
 

Company Gross Operating Profits (QoQ) 

5%

 

0.3% 

 

4.7% 

 
 

 

CHF

 
 
 

Retail Sales (YoY) 

4.4%

 

2.0% 

 

1.7% 

 
 

 

GBP

 
 
 

Services PMI 

53.8

 

55.0 

 

56.0 

 
 

 

EUR

 
 
 

Retail Sales (MoM) 

0.3%

 

-0.1% 

 

-0.5% 

 
 

In Europe

Euro zone final composite PMI falls to final 49.3 in February

Italy services PMI 44.1 in February. Down from 44.8 in January and well below Reuter's median forecast of 45.2.

Swiss January retail sales up +4.4% y/y.

Spanish services PMI 41.9 in February. Demonstrably lower than 46.1 in January and Reuter's median forecast of 45.9.Eighth month of contraction, lowest read since November.

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Economic Events: (GMT)

Tuesday will be a very quiet day on the Economic Data Front. Keep an eye on Australia, where the RBA will be announcing rates.

10:00     EUR       GDP (QoQ)                                         -0.3%                     -0.3%      

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.            

15:00     CAD      Ivey PMI                                             62.1                        64.1

The Ivey Purchasing Managers' Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction. The index is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business. Traders watch these surveys closely as purchasing managers usually have early access to data about their company's performance, which can be a leading indicator of overall economic performance.

A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

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
1676.47
1684.98
1695.47
1703.98
1714.47
1722.98
1733.47

Fibonacci
1684.98
1692.24
1696.73
1703.98
1711.24
1715.73
1722.98

Camarilla
1700.73
1702.47
1704.21
1703.98
1707.69
1709.43
1711.18

Woodie's
-
1685.48
1696.45
1704.48
1715.45
1723.48
-

DeMark's
-
-
1709.23
1701.36
1690.23
-
-