Yesterday all the EU states except the UK and Czech Republic signed an agreement on new budget rules within the union. The agreement implies sanctions against those EU governments who will violate the budget deficit limit. The EU summit participants also agreed to start the European Stability Mechanism with a €500B potential in order to support the needy eurozone states. In the meantime, Greece continues the debt restructuring talks with its lenders.
S&P has recently warned some of the G20 states that they may lose their highest credit rating in 2015 if the governments do not implement reforms. Some European countries, Japan and the USA are among them.
Japan’s production gained 4% in December 2011. The rate of unemployment turned out to be higher than expected.
Germany’s retail sales increased by 0.8% in December as the amount of the unemployed declined by 10K people. France is expected to see its consumer spending grow up to 0.2%. The eurozone’s rate of unemployment is believed to reach 10.4% - the highest level since 1998.
Gold keeps retaining positive correlation with the Euro. According to the BBA, the demand for physical gold in India is still rather low because of high prices and volatile national currency. Yesterday Venezuela finished the process of repatriating its gold reserves.
Since the beginning of January the US Mint has already sold 5.7M ounces of silver coins and 250K ounces of gold coins, which is close to the record sales seen a year ago.
According to the Department of Commodity Trading of , today gold may continue its rally up to 1750, 1761, 1775. If an H1 bar closes below 1733, there probability of going down to 1720, 1710, 1700 will definitely increase.
Silver has all chances to resume its rally as well. The targets are 34.50, 34.70. In order to do that, the price will have to consolidate above 33.50. Once an H1 bar closes below 33.40, it may well trigger a bearish swing down to 33 and maybe 32.40.
