Gold prices Fundamental Analysis weekly October 10-14, 2011

Gold prices Fundamental Analysis weekly October 10-14, 2011 : Gold prices gained 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 volatility was rather dominant in the overall movement of gold prices specifically, since traders were still cautious.

Investors found some comfort in the measures deployed by the ECB to ease the financial strain amid the lack of concrete actions from leaders. The bank extended the regular liquidity operations at least until July 2012, and added new 12 and 13 month tenders in addition to setting 40 billion euros for covered bonds purchases which is aimed at ensuring liquidity availability to the market.

The Bank of England on the other hand announced an expansion to its Asset Purchases Facility to reach 275 billion pounds, as the BOE are easing monetary policy to be able to withstand the recent turbulence from the European debt crisis, while also stabilizing theU.K.economy.

The pessimism eased last week especially with the stronger than expected jobs report from the United States that showed 103 thousand added jobs in the economy in September which somehow eased woes of recession and focused on slowdown.

The week is low of major fundamentals this week which leaves the focus again on the outlook for growth and the debt crisis. The EU leaders will continue to discuss the means needed to contain the crisis especially with the meeting scheduled between Sarkozy and Merkel where positive comments on how they will help banks and Greece will be good support to the sentiment and help the upside recovery.

On the other hand, the FOMC minutes will remind investors of the ongoing downside pressures and intensified downside risks to growth although since the announcement of Operation Twist Bernanke reiterated the Federal Reserve’s commitment to support the recovery and take all necessary steps.

Therefore, once again we expect the main attention to be to the debt crisis again and the measures to be taken especially as investors will turn to the G20 summit at the end of the week ahead of the EU leaders summit early the next week which will hold the final answer to markets.

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. Original Post Fxempire.com For the latest updates PRESS CTR + D or visit Stock Market news Today

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