SELL GOLD IN THE RANGE OF 1340-1355...SL 1363$ AND HOLD FOR BIG PROFITS- Gold was choppy this week. It was seen moving sideways just before the payrolls data was released. Investors believed that a weak figure would mean that the economy is still fragile and this would underpin gold prices. Geopolitical tensions in Ukraine have underpin gold prices this week. Spot gold is at $1,350/oz, down 40 cents from its previous close. Spot gold prices rose 1.2% overnight after U.S. President Barack Obama said that Crimeas referendum on seceding from Ukraine to join Russia is illegal and added that the U.S. and European Union are united against Russias intervention in Ukraine. In case the situation worsened then gold prices are expected to rise. But the actual scenario was completely opposite. Gold plunged nearly 1 per cent after US data showed that job growth picked up pace sharply, thus ruling out fears of an economic slowdown. This in turn would meant that the Federal Reserve would continue to taper its monetary stimulus. Gold closed 1% lower on Friday, suffering from their biggest one-day point and percentage loss in more than a week, after a closely-watched jobs report signalled stronger-than-expected employment trends, dulling the metal’s investment appeal. The Labour Department said that the employers had added 1,75,000 jobs to their payrolls compared to 1,29,000 in January, The unemployment rate, rose to 6.7 percent from a five year low if 6.6 per cent as Americans flooded into the market to search for work. However, many believe that this data could not be valid up to a certain point because of the extreme weather conditions that prevailed last month, Spot gold fell as much as 1.5 per cent to a low of 1329.35 an ounce and was last seen trading at 1338.09 An optimistic economic data creates such a sentiment in the market that people believe that holding safe haven assets in your portfolio is no longer feasible. Compared to December and January, Februarys report was much positive than expected. While some investors said the January and December reports were distorted by severe winter weather, others worried the weakness was indicative of a broader economic slowdown and would force the Federal Reserve to sustain its stimulus efforts for longer than previously thought. Instead, Februarys data showed improvement even though winter storms continued to pummel much of the Northeast U.S. But for the week, gold ended at a one per cent escalation, capitalising on gains earlier in the week when the tensions in Ukraine soared. In the short term, what holds more importance that US data is that what happens in Ukraine. On Friday, President Vladimir Putin rebuffed a warning from US President Barack Obama over Moscows military intervention in Crimea, saying that Russia could not ignore calls for help from Russian speakers in Ukraine. The other factor that pushed gold prices down, was the data released from China. Data released over the weekend showed that Chinese exports collapsed 18.1% in February from a year earlier, disappointing expectations for a 6.8% increase. Imports rose 10.1%, compared to forecasts for an 8% increase. The significant decline in China’s exports led to a deficit of $22.98 billion last month, compared to a surplus of $31.86 billion in January. Analysts had expected a surplus of $14.5 billion in February. A separate report showed that consumer price inflation in China rose 2% in February from a year earlier, in line with expectations, while producer price inflation declined 2%, compared to forecasts for a 1.9% drop. The downbeat data highlighted concerns about slowing growth in the worlds biggest consumer of the industrial metal. Moreover, other precious metals like palladium were seen having interesting movements over the week. Palladium posted its biggest weekly gain in nearly eight months with a 5 per cent increase at $781.50 an ounce. Furthering, the political tension in Russia and union strike in South Africa have triggered fears of supply constraint which has escalated these prices. Platinum too was seen up for a consecutive week. It gained 2.6 percent , trading at $1477.2 while silver fell 2.9 percent to $20.82 In the week ahead, investors will be anticipating what will be closely-watched data on retail sales and consumer sentiment for further indications of the strength of the economy and the future course of monetary policy. Gold prices are set to fall next week as the yellow metals trend is expected to remain downward. TRADE AT YOURS OWN RISK..............JUST A VIEW..
Posted on: Mon, 10 Mar 2014 23:52:53 +0000
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