Friday, May 31, 2013

Weak U.S. Data Pushes Gold to Two Week High...

August Gold reached a two-week high after weaker-than-expected U.S. economic news helped drive the U.S. Dollar lower. The metal was trading firmer before the release of the Preliminary U.S. GDP and Weekly Unemployment Claims due to the volatility in the Japanese markets, but it was the economic data which gave it its biggest boost.

The news that the U.S. economy expanded only at a 2.4 percent annual rate in the first quarter, missed pre-report estimates of 2.5 percent. Initial claims increased 10,000 to a seasonally adjusted 354,000 from 340,000 previously. Traders went into the report looking for 342,000.

The weak data drove investors out of the U.S. Dollar because it probably means the Fed will maintain the current pace of its asset-purchasing program. Since gold is priced in dollars, the break in the Greenback made gold more attractive to foreign investors.

Although the main trend is down, its looks as if gold has enough upside momentum to challenge a minor retracement zone at $1413.25 to $1431.01.

A combination of the weaker dollar and a Euro Zone report showing that confidence in the area’s economy improved more than anticipated in May helped drive up the EUR/USD. The poor U.S. economic reports helped weaken the dollar against the Euro because it likely means the Fed will refrain from tapering its aggressive asset-purchasing program.

Technically, the EUR/USD challenged a major retracement zone at 1.3019 to 1.3072 before selling off slightly. The main trend also turned up on the daily chart when the market crossed the swing top at 1.2997.

The GBP/USD turned its main trend to up to up on the daily chart this morning when the Forex pair took out a swing top at 1.5156. The current upside momentum suggests the market is poised to test a major retracement zone at 1.5307 to 1.5377.

Fundamentally, the Sterling found support earlier in the session following the release of a report that showed U.K. house prices rose at the fastest annual rate since November 2011. The mortgage lender Nationwide reported that house prices rose by 1.1% in May from a year earlier.
July Crude Oil weakened early in the session, but found support when it briefly pierced a major 50% level at $91.77. The actual low was $91.65. Profit-taking and bottom-picking helped turn crude oil to the upside, however, the main trend remains down.

Fundamentally, U.S. inventories rose unexpectedly last month. This likely means crude oil will remain range bound over the near-term. Along as the tops at $97.38 and $97.35 remain intact, look for the market to continue to find support in the $91.77 to $90.45 range.

Contact Us:

Asad Rasheed

For more information please visit our website century financial brokers.

 Here are some useful links that you can follow:

Here is a CFB blog that gives useful daily Gold Analysis on dailybasis.
You can also follow CFB on facebook (useful advice on posts regularly)

Here is another blog that provides regular news and information and is very useful for Forex Signals.

News Source: