Fundermentals on gold
On passed week there were some events that significant in general, but had only slight impact on gold market. Let’s start from US Data on consumer spending and confidence, factory activity that has pointed on pickup in economy growth. Although Bernanke was hurry to calm down markets by statement that Fed doesn’t see yet reasons for closing QE program and turn to more 
hawkish policy – this had no expectable impact. We’ve discussed that previous FOMC voting has carried real surprise when votes on QE outlook are divided. Investors still believe that better U.S. outlook could prompt the Fed Reserve to halt its stimulus earlier than expected. Whatever Big Ben says – votes are split and this fact remains. It just means that situation is changing per se and when Fed will announce closing of QE officially – this is just a question of time.
Second issue is about US Budget spending cuts across the board. U.S. lawmakers have so far failed to agree on a comprehensive budget plan to reduce the government deficit. Since this initiative is not new and the failure to find a compromise on the way how will be better to accomplish it, this had moderate impact on gold prices. What is a real interesting is that new debates on US Debt ceil should come on May and the fact that the Republicans and Democrats have been unable to agree on that boast poorly for their ability to come on agreement over the debt ceiling. Thus Analysts now closely monitor how a divided Congress will deal with the next debt ceiling, which is scheduled to come into effect on May 18. Interestingly that gold rallied to an all-time high in September 2011 a month after the United States lost its “AAA” rating that year.
hawkish policy – this had no expectable impact. We’ve discussed that previous FOMC voting has carried real surprise when votes on QE outlook are divided. Investors still believe that better U.S. outlook could prompt the Fed Reserve to halt its stimulus earlier than expected. Whatever Big Ben says – votes are split and this fact remains. It just means that situation is changing per se and when Fed will announce closing of QE officially – this is just a question of time. Second issue is about US Budget spending cuts across the board. U.S. lawmakers have so far failed to agree on a comprehensive budget plan to reduce the government deficit. Since this initiative is not new and the failure to find a compromise on the way how will be better to accomplish it, this had moderate impact on gold prices. What is a real interesting is that new debates on US Debt ceil should come on May and the fact that the Republicans and Democrats have been unable to agree on that boast poorly for their ability to come on agreement over the debt ceiling. Thus Analysts now closely monitor how a divided Congress will deal with the next debt ceiling, which is scheduled to come into effect on May 18. Interestingly that gold rallied to an all-time high in September 2011 a month after the United States lost its “AAA” rating that year.
aily 
ABCD 100% expansion
4hrs
So the major driven force for gold market will remain US economy data and changing Fed rhetoric. Most investors are careful with radical assessment of current situation on Gold. There are different opinions now from those who think that gold could show deep retracement to 1200-1300 level (we’ve discussed this either on previous week) to those who think that retracement can finish as fast as it has started and may be Gold is forming Double Bottom on daily 
time frame . Since there is no agreement on spending sequestering – if debt will continue to rise this will support gold prices in long term perspective.
1hrly
Still all ETF across the board confirm by holding statistics that this is one among greatest outflows on Gold market. Hedge funds have made significant withdrawals and ETF sold out their holdings. Thus SPDR ETF has contracted holdings more than for 70 tones in 2 weeks.
As we will see from charts below – speculators partially have re-established longs but this has happened at decreasing of Open Interest. This is more common with retracement action rather than trend. So this situation indirectly hints on potential downward continuation.
Latest COT Report shows this recovery – speculators’ position slightly increases but this happens amid decreasing of Open Interest.
2nd 1hrly
view
view
No comments:
Post a Comment