The risk of an armed conflict with Iran escalated after the killing of an Iranian nuclear expert. Iran blamed Israel. Japan confirmed its gradual reduction of crude oil export from Iran, thus supporting the embargo imposed on Iran. China refused to do the same. In the meantime, Iran’s national currency keeps depreciating.
Spain is about to hold its bond auction to the amount of 5B euro. Italy is planning to hold its bond auction tomorrow.
Yesterday Fitch Ratings warned the eurozone once again, thus urging the countries to accelerate and intensify the process of coming out of the debt crisis. The rating agency also warned Italy about the possible cut of its credit rating.
Today the ECB is to announce its interest rate decision.
December’s rate of inflation in china reached 4.1% (y/y). This is the lowest figure in 15 months. Some analysts say this may increase the chances of quantitative easing.
Yesterday gold was negatively correlated with the common European currency. China and India keep showing steady demand for gold in advance of Chinese New Year. Yesterday an ounce of physical gold in Shanghai cost $1655.83, which was $13 higher than the spot price.
Forecast: According to the Department of Commodity Trading of , today gold is likely to continue its rally, with targets around 1650, 1657. A break above 1657 increases the probability of going up to 1667. The price may also retrace down to 1639-1640. A break and consolidation below the level will give way to a deeper retracement down to 1622, 1617.
Yesterday silver stuck in a range. Today it is expected to come out of the price range, probably in the upward direction. In order to do that, the price will have to break and consolidate above 30.1. In this case, the price may reach 30.50-30.65. The downward scenario suggests a downswing to 29.50, 29.30, if an H1 bar closes below 29.85.
