China has recently published its macroeconomic stats for 2011. Its GDP and manufacturing production grew by 8.9% and 12.8% correspondingly (both came out better than expected). However, this is the weakest GDP growth in 10 quarters. Stock markets reacted with strength, thus expecting financial stimulation.
Yesterday S&P downgraded the rating of the EFSF. Strange as it may seem, but even after France had its credit rating cut, yesterday’s bond auction showed lower French bond yield than during the previous auction held on Jan 9th. Today Greece, Spain and the EFSF will hold their own auctions.
Americans start saving less money, which may hit at another slowdown in the US economy. The level of savings has fallen down to the lowest level since late 2007, when there emerged the first signs of the forthcoming recession. However, the level of retail sales in the USA is expected to grow by 3.4% in 2012.
Against this background, yesterday gold and silver resumed their rally. According to the Italian association of jewelers, in 2011 the sales of jewelry in Italy, Europe’s biggest consumer, declined dramatically and are expected to stay low this year. At the same time, Indian jewelers expect a 10-15% increase in jewelry sales.
Forecast: According to the Department of Commodity Trading of , gold will probably continue its rally up to 1667, 1697-1700. There is still a chance of retracing down to 1647-1650. If an H1 bar closes below 1647-1650, the price may go further down to 1637. If an H1 bar fails to close above the monthly high, it will activate the bearish scenario.
As for silver, it is still in uptrend, on its way to 30.40-30.50. After that, it will probably retrace down to 30.12, 29.95-30. The inability to close an H1 bar above the monthly high will activate the bearish scenario.
