Amid lower manufacturing production and consumer sentiment, Bernanke said yesterday that it was too premature to consider a sustainable economic recovery. However, he didn’t make any hints at further economic stimulation. The CPI declined on the expectation of inflation growth. Today’s durable goods orders report is expected to show a 3% increase.
In the meantime, Asian markets keep seeing lower demand for gold. Indian jewelers have been on strike since the authorities doubled the gold import duties.
The Italian and Greek leaders are sure that the eurozone crisis is nearly over. The EFSF is expected to be expanded up to 692B euro during the forthcoming Euro Group meeting scheduled for March 30th.
Japanese officials are more reserved in their estimation of the eurozone prospects. They point out the stagnation risks in the European economy. This week the Japanese parliament is to approve the country’s budget. It suggests some tax hikes amid budget deficit threats.
Chinese stocks declined after the report on the income of manufacturing production companies. Some analysts expect the corporate income to show no growth at all this year. Without the central bank’s stimuli, it may result in the population's lower incomes, which may lead to a significant decline in the demand for gold.
It should be noted that China and India account for over 42% of the global demand for gold.
According to the Commodity Trading Department of , gold is downtrend. It will escalate if the price fails to consolidate above 1685. The closest levels of support are 1675, 1660 and 1650. A break and consolidation above 1694will trigger the bullish scenario with targets around 1710, 1725, 1750.
Silver is in downtrend as well. However, a test of 32.75, 33.0 is still probable. A failure to consolidate above 33.10 will support the downswing. The targets are 32.25, 32.0. If the price does consolidate above 33.10, it will probably start a rally up to 33.50, 33.75, and maybe 33.95.
