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Saturday, October 15, 2011

gold Fundamental Analysis for weekly October 17-21, 2011

gold Fundamental Analysis for weekly October 17-21, 2011 ; Gold prices rose last week, as gold prices continued to recover from the sharp drop that took prices from the historic high above $1900 an ounce to around $1500 an ounce over the past period, where the U.S. dollar weakened in general, which provided gold prices with some bullish momentum. Nonetheless, gold prices fluctuated throughout last week with an upside bias.

Investors were optimistic that European leaders will be able to craft a plan that will ease the deepening debt crisis in the euro zone region, which put negative pressure on lower yielding assets including the U.S. dollar, which allowed gold prices to gain.

If the U.S. dollar continues to weaken on rising confidence, we should expect gold prices to rise as well, although we still expect volatility to continue to dominate gold prices, since investors are still cautious amid the uncertainty that is surrounding the outlook, but overall, we still expect a bullish wave to support gold prices next week.

The week is full of economic fundamentals from all around the globe, especially from theUnited States, where data on inflation will be released next week, while other data include manufacturing and housing figures among several others.

We can see somewhat improved sentiment in the market and slightly eased fears on the pledges from the euro area to contain the debt crisis by supportingGreeceand recapitalizing banks which eased the jitters over a financial system collapse inEuropeand spreading to the global financial system.

This improvement was mirrored in the roadmap presented by EC President Jose Barroso and the pledges from Germany and France to present a plan as soon as the October 23 summit and ahead of the November G20 Summit.

Nevertheless, the market did not still see any concrete plans to the recapitalization or to what extent will the private sector participate in easing Greek woes, especially as the market is pricing 50-60% write-downs on Greek bonds much beyond the 21% according to the July agreement.

The Chinese growth figures are also to add to the volatility in the market and the regained focus on growth this week and how officials should move to kick start a stalling recovery amid the debt problems inEurope.

We continue to expect that gold prices will rise over the coming period, however, we also expect volatility to continue to dominate gold prices, and that could push gold prices lower as well over intraday and short term basis. soure www.fxempire.com For the latest updates PRESS CTR + D or visit Stock Market news Today

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