Gold had a roller coaster week last week however it managed to finish the week above the key US$1,200 level.
Bullion.Directory precious metals analysis 13 April, 2015
By Harley Salt
Co-founder, Director of Sales Trading at Bullion Index
Monday the Chinese Trade Balance is expected to be released, its surplus is expected to fall to around US$40 billion.
Tuesday sees a number of key economic reports released starting with the March UK CPI reading, it is going to be an important reading for the Bank of England as a low reading will add to concerns around deflation in the UK. Also on Tuesday we see the US Retail Sales for March, this will be the major event of the week for gold traders. We will be able to get a better reading on what exactly is going on with US economy and how healthy it really is.
Should the number fall short of the expected 1% increase then look to see the US dollar soften while the price of gold to head higher. A disappointing result will add weight to delaying a rate rise until 2016. We expect to see investors going long gold ahead of the release of the Retail Sales data given the data coming out of the US in recent months has been showing a trend of coming in below expectations.
Wednesday has the ECB rates decision and while rates are going to remain unchanged, what traders will be looking at is the ECB statement which will give us a read on what the ECB thinks on the EU’s current state and outlook. Also on Wednesday the US Beige Book is released, again this will give us an insight into the US economy, traders should look to see if the tone is turning dovish, a positive for the price of gold.
Chinese GDP data is also expected to be released, the market is expecting a print of 7%, a drop from 7.3%.
On Thursday the Australian Unemployment rate is expected to remain flat at 6.3% according to Westpac.
Friday sees the release of the March Eurozone CPI and the March US CPI data. Euro inflation has been below zero since December with the market expecting that trend to continue. US CPI is expected to see an increase from 0.2% to 0.3%.
With a large amount of key data out this week expect to see increased volatility across all markets. I expect to see gold test the US$1,220/oz resistance level sometime this week.
Gold needs to consolidate above this level before moving higher.
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