More News from the U.S. Next Week to Excite Gold?
The U.S. Comex gold futures rebounded 0.32 percent in the past two days
to end at $1,770.60 on Thursday. Both the S&P 500 index and the
Euro Stoxx 50 index ended their four-day losing streaks with the U.S.
stock market staying flat and the European market rallying 1.24 percent
on Thursday. After dropping 2.51 percent, the crude oil futures may
look to rise about 2.4 percent this week. The Dollar Index rebounded
0.55 percent after selling off 0.75 percent last week.
The tone at the annual IMF-World Bank meeting in Tokyo does not seem to
be very optimistic. The IMF Managing Director Largarde expressed that
global growth is much slower than expected and is not rising fast enough
to create jobs for nations. However, the IMF is proposing to give more
time to Greece to fulfill its fiscal consolidation in the next two
years. Recently, Spain’s long-term credit rating has been cut by
S&P to BBB-, just one level above the junk status. Spain was not
only suffering from economic contraction due to its banking problems and
austerity measures, but also the unpredictable policy from the
Eurozone. In the meantime, the Eurozone industrial production in
August, to be announced on 12 October, is expected to contract by 0.4
percent, compared to a revised rise of 0.5 percent in July.
A small rebound in gold price this week was helped by a better than
expected U.S. jobless claims which fell by 30,000 to 339,000 during the
week ending 6 October. The higher optimism towards the U.S. economy
helps commodities and equities to rebound. Gold price is still
underpinned by strong demand from the gold-backed ETP side as well as
traders raising their bets on gold futures and options to seven-month
high as global central banks are cutting rates or engaging in
money-printing.
The important events to watch would be the Eurozone August industrial
production data on 12 October, the second U.S. Presidential debate and
the September U.S. industrial production data on 16 October, the U.K.
bank rate vote and the U.S. September housing starts on 17 October, the
EU Summit talk on 18 October and the Q3 China GDP growth on 19 October.
12 Oct 2012 | Categories: Gold
