Today’s preliminary China PMI report has disappointed investors, thus indicating a further manufacturing slowdown. The current preliminary readings are 48.1 versus February’s 49.6. This suggests the 5th consecutive month of contraction. Analysts expect the People’s Bank of China to lower the yuan interest rate or reserve requirements.
February’s report on Japan’s external trade balance came as a surprise, showing a slight surplus due to higher export. However, it is still 2.7% lower than last year.
Yesterday’s US hosing stats came out poorer than expected. The unemployment report is scheduled for today. These stats are fairly significant because a 100K increase makes the average consumer income by 0.2-0.3%.
Today the markets a waiting for the news form the eurozone. The focus is on manufacturing production.
The UK Exchequer reported yesterday that it was not planning to expand its gold reserves.
Today Indian jewelers are expected to return to the market of gold after 5 days of protests, which may increase the demand for physical gold.
According to the Commodity Trading Department of , gold is in downtrend. It will intensify on breaking below 1645. In this case the price may decline down to 1625, 1600. In order to resume the rally, the price will have to consolidate above 1655. The closest levels of resistance are 1675, 1680.
As for silver, it is in downtrend as well. The probable targets are 32.0, 31.75, 31.30. A test of 32.25 is probable. Once the price consolidates above it, the rally will resume. The targets are 32.6, 33.0.
