In advance of the World Economic Forum in Davos, Switzerland, scheduled for January 25th – 29th 2012, Christine Lagarde, Managing Director of the IMF, warned the leaders that the fiscal toughening threatens the global economic growth. Such a statement can be treated as a call for stimulating the economy through increasing the money supply. Investors expect the IMF to attract $600B in order to help the eurozone. The US and UK refused to assume commitments.
Yesterday France and Spain held bond auctions. France gained 7.97B euro on bond sales. The yield was equal to 1.05%. The 20-year Spanish bond yield declined down to 5.403%.
The US unemployment claims has hit the lowest level since April 208.
China’s PMI suggest a possible cutback in production this month (the 3rd month in a row).
Turkey is taking steps to find other oil resources in order to reduce its dependence on the export of crude oil from Iran. The top managers of the Turpas refinery are planning to meet with Saudi Arabia’s officials to discuss the issue. They will also consider the possibility of importing oil from Russia, Azerbaijan and Western Africa. In the meantime, Italian, Greek and Spanish refineries are going to continue importing oil from Iran, thus expecting to get an exclusion from the EU sanctions for 6 months.
Against this background, gold made a new monthly high and retraced on Asian profit-taking in advance of Chinese New Year.
Forecast: According to the Department of Commodity Trading of , today gold may continue its rally. The closest level of resistance is 1654. The probable targets are 1 665-1670. A break above them will give way to 1695-1700. However, in order to continue the rally the price will have to consolidate above 1658. The inability to do that will trigger a downswing to 1638.
As for silver, the closest level of support is 30.50. If an H1 bar closes above 30.80, it will probably continue its rally up to 31.0, 31.25. If an H1 bar closes below 30.50, it will trigger the downward scenario with targets around 29.95-30.
