Monday, 23 April 2012

Guest Commentary: Gold & Silver Weekly Outlook for April 23-27 | DailyFX

Last week's slow paced movement of bullion might change direction in the upcoming week as the FOMC meeting will be held on Wednesday and may sharply affect the direction of bullion. Here is a short overview and an outlook for the week of April 23rd to 27th; in this analysis I use fundamental analysis to examine how the upcoming events, decisions and financial reports may affect the direction of gold and consequently also SPDR Gold Trust (GLD).
Gold moderately declined during last week by 1.05%. Silver slightly rose on a weekly scale by 1.05%.
Furthermore, during last week the GLD gold etf also edged down by 0.82% and reached on April 20th 159.54.
During last week the U.S jobless claims slightly declined (week over week); this news didn't seem to have much effect on the forex or commodities markets. The housing market in the U.S continued to show signs of slow recovery at best. Finally the U.S Philly Fed had grown by a slightly slower pace than a month earlier. This disappointing news may have adversely affected the U.S dollar.
The video link on gold and silver prices provides a broad outlook for the major news and events that might affect the direction of metals during the week of April 23rd to 27th; the video includes reviewing the main reports, events, decisions and news items to be published during the upcoming week. Some of these reports and events include:
Tuesday – U.S Consumer Confidence: according to the previous report, the consumer confidence index decreased in March (M-o-M). The current expectations are that the April index may change direction and edge up; this report might affect commodities market;
Wednesday – ECB President Draghi Speaks: Following the April ECB rate decision in which the rate wasn't changed at 1% Mario Draghi will speak and may refer to ECB's plan to calm the markets including implementing LTRO 3 or resuming the SMP. His speech may influence the direction of the Euro/USD;
Wednesday – U.S Core Durable Goods: This monthly update will examine the developments in U.S. orders of durable goods in the manufacturing sector during March 2012. According to a estimate for February 2012, new orders of manufactured durable goods increased by $4.5 billion to $211.8 billion; if this report will continue to be positive then it may strengthen the US dollar;
Wednesday – FOMC Meeting (Statement): The FOMC will convene for the third time this year; I think the FOMC won't decide on another stimulus plan, especially since the U.S's economic progress is still moving up (e.g. the U.S labor market and U.S GDP are still growing); I speculate that if there won't be another call for a stimulus plan or there won't be a hint in the statement for it in the near future, bullion are likely to sharply fall;
Friday – First U.S GDP 1Q 2012 Estimate: This will be the first estimate of U.S's first quarter 2012 real GDP growth. In the 4Q2011 the GDP growth rate reached 3%. The current expectations are that the growth rate in the first quarter will be similar to the fourth quarter of 2012 (for the final estimate of 4Q GDP).
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