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Gold Trading Week Ahead – 6 April 2015


Bullion index - the week ahead

Gold has started the new week on a positive note after disappointing U.S. March Non-Farm Payroll data showed a rise of only 126,000 versus an expected gain of 245,000.

Harley Salt precious metals analysis 6 April, 2015
By Harley Salt

Co-founder, Director of Sales Trading at Bullion Index

We have now seen two months of disappointing jobs data out of the U.S, the latest setback adds further weight to the view that the Fed will be hesitant to raise rates any time soon. The uncertainty and low interest rate environment is good for safe-haven assets such as gold.

This week we see a handful of key events that are set to drive the gold market.

On Tuesday we have the Reserve Bank of Australia (RBA) holding its monthly rates meeting, futures markets are pricing in an 80% chance of a rate cut.

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If the RBA does cut rates to 2%, it will be the lowest level seen in Australia since the 1950’s. A rate cut should provide good support for gold priced in Australian dollars. If the RBA does not cut rates on Tuesday it will almost certainly will at its May meeting.

The FOMC minutes from the March meeting will be released on Wednesday, again investors will be looking for any hints as to when the Fed will pull the trigger on rates.

Thursday sees the Bank of England meet, however no change is expected, while later in the session we will see the release of the U.S. Initial Jobless claims.

As we know the employment data out of the U.S. has been very weak of late so further weakness is going to put pressure on the US dollar while boosting the demand for gold.

On Friday the big data to watch is the China CPI for March, it is expected to drop to 1.3% after it rose to 1.4% in February on the back of higher prices over the Lunar New Year. Consumer inflation in China is expected to remain subdued in the short to medium term.

Gold is expected to test the US$1,220/oz resistance level this week. Gold investors are looking for gold to consolidate above this level before moving higher.

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