Gold Trading For The Week Ahead

May 4, 2015

Gold ended last week on a flat note having fallen below US$1,180/oz with better than expected jobless data out of the US pushing gold lower. It was a surprise to the markets to finally see positive data from the US, of late the majority of key data has been coming in below expectations. With one positive bit of data the market seemed to grab this and give hope to a near term rate rise which kept gold demand weak. We still do not believe the Fed will move on rates this year given the overall weakness in the US economy and the continuing flow of poor economic data.

This week could be another volatile week for gold with a number of key economic releases due out that will no doubt influence the price of gold.

Monday sees HSBC China Manufacturing PMI data and Australian Building Approvals.

Tuesday we have the RBA monetary policy meeting. We believe the RBA will cut its cash rate by 25bps at this meeting. They may also talk down the Aussie dollar, if they do expect the AUD to weaken and the price of gold in AUD to jump higher. Also out on Tuesday is the Australian Trade Balance and UK Construction PMI.

Wednesday will see the releases of US Trade Balance data for March with the deficit expected to widen. Retail Sales data is also due out for Australia and the EU.

Thursday is the UK general election with BBC reporting that is it the most unpredictable election ever. The ADP Employment Report is due out, that will give investors some guidance on the US non-farm payroll data out the next day. Australian Employment Data is also due out as are US jobless claims. 

Friday is a busy day for data with Trade Balance data from China, Germany and the UK due to be released, along with the Canadian Unemployment rate. The most important data for the week, the US non-farm payroll data will also be released. The US non-farm payrolls are expected to come in better than the previous month which was very disappointing, unemployment is expected to drop from 5.5% to 5.4%. Any weakness in the non-farm payroll data will see gold demand increase.

It should be another interesting week across precious metals markets, I expect to see gold test the US$1,191/oz resistance level this week, while if gold breaks below US$1,173/oz then we may not see support come in until US$1,150/oz.


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© 2015 Copyright Harley Salt - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harley Salt is co-founder of a physical gold, silver and platinum trading and investing company located in Melbourne, Australia.

Bullion Index offers direct market access to 15 global physical bullion exchanges and storage facilities in key locations including London, Zurich, New York, Hong Kong, Singapore, Dubai and Sydney. Their clients from across the globe can trade bullion bars and investment grade coins simply and securely via the MetalDesk online trading platform.

One cubic foot of gold weighs more than half a ton (1,306 pounds).

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