Gold Will Be Testing $1675

Today investors will be focused on the Fed Reserve’s interest rate forecast. The forecast will be published for the first time in history. Even though most investors expect the key interest rate to stay unchanged till mid 2014, the forecast can make them change their mind.

    
In 2011 Japan’s balance of trade saw a deficit for the first time since 1980. Some analysts expect some international rating agencies to resume their pressure on Tokyo. The Japanese Minister of Finance is sure that Japan won’t be able to service its debt if the bond yield exceeds 3%. According to the OECD, Japan’s public debt may exceed 230% of its GDP in 2013. Honda has recently announced it is moving the production of its Acura NSX concept to the USA (the only plant that can built this model). Smaller models will be manufactured in Mexico. Nissan is moving some of its production to Thailand. HSBC, Europe’s biggest bank, is going to sell its private banking unit in Japan.

The IMF officials told yesterday that the eurozone crisis may throw the global economy into the abyss of recession. The IMF downgraded the forecast for the global economic growth in 2012 from 4% down to 3.3% and warned the growth may slow down to 1.3% if Europe lets the crisis escalate further. Some IMF experts are sure that it still not too late to take timely and efficient steps to come out of the crisis and to avoid the doomsday scenario. The IMF also expects the eurozone economy to shrink by 0.5% this year.

After yesterday’s correction, gold and silver strengthened a little.
According to the Department of Commodity Trading of , today gold will be testing 1675 after breaking above 1668.50. A break and consolidation below 1664 will increase the probability of going further down to 1658 and maybe 1655. If an H1 bar closes above 1677, it will probably trigger the bullish scenario, with targets around 1686, 1698-1700, and maybe 1716.

As for silver, today it will probably be testing the 32.35-32.41 resistance area. If an H1 bar closes above 32.4, this will increase the probability of a further rally up to 33-33.10, and maybe 33.50, 33.75. If the test fails, it may trigger the downswing to 31.67, 31.5, and maybe 31.10-31.0.