Gold starts the new trading week at a 3 month low after a strong reaction to data out of the U.S. on Friday.
Bullion.Directory precious metals analysis 9 March, 2015
By Harley Salt
Co-founder, Director of Sales Trading at Bullion Index
Following on from a busy week last week from an economic data standpoint, this week sees a bit of a lull in key data as traders await the Federal Reserve meeting next week (17-18 March).
The big event of the week will be happening later today when the ECB kicking off its massive QE/ money printing program. Gold has been tracking the ECB balance sheet up and down in recent times so with the ECB today effectively printing more money will we see gold track back higher.
At the moment gold is being driving by both the ECB and the Federal Reserve but the battle for gold is which way will it break especially now we are about to see an even more significant divergence in policies between the ECB and the Fed.
Other major events and data flows this week include, Greece’s Finance Minster presenting 6 reform proposals to Eurogroup members on Monday.
On Tuesday the UK Manufacturing Productions numbers are out, this will give traders an indication as to the health of the UK economy, it has been improving fast so we will see if it is still on track.
On Thursday we see the U.S. Retail Sales data, if sales come in above expectation then we may see a rally in the US dollar an in turn a dip in the price of gold. If however it comes in below forecast then we may see gold bounce higher. The forecast is for retail sales in February to be +0.5%.
We expect to see investors use this dip as a buying opportunity and add to long trades at the current market levels.
Gold closed at US$1,168.70oz in New York on Friday. In early trade Monday it is up 50 cents to US$1,169.20oz.
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