Today Japan has released many macroeconomic reports. The overall picture is positive as it indicates economic growth. The PMI is above 51 and higher than the previous readings. The rate of unemployment is declining as companies employ new workers, especially in Japan’s construction sector. Consumer spending is growing as well despite pessimistic forecast. However, manufacturing production declined by 1.2%, thus exceeding the forecast. These stats do not imply any further economic stimulation by the Bank of England.
The US stats also suggest economic growth. The rate of unemployment declined down to the lowest level since 2008. Today’s consumer spending report is expected to show a 0.6% increase.
Europe remains a major risk. Yesterday’s protests in Spain against the employment reform grew into clashes with the police. Today Spanish legislators will consider the country’s budget, which implies deficit cuts down to 5.3% of GDP. Moreover, France and Greece will hold presidential elections in April, which adds uncertainty to the situation in Europe.
Most investors are looking forward to see China’s PMI report, which is expected to hint at the future pace of China’s economic growth.
Asian dealers report that the demand for physical gold remains steadily low. Singapore dealers say they do not anticipate a demand increase if the price stays above $1600/oz.
UBS downgraded its gold forecast for 2012 form $2050 down to $1680 per ounce. However, the bank preserved its positive forecasts for platinum and palladium.
Today is the last trading day of the quarter, which suggests a possible increase in market volatility.
According to the Commodity Trading Department of , gold is rallying. However, the price may test 1660-1659, and even 1655. If an H1 price bar closes below 1654, it may trigger the bearish scenario. The probable targets are 1637, 1625. Otherwise, the price will suggests some demand, which may result in a rally up to 1675-1678.
As for silver, it is rallying as well. The closest levels of resistance are 32.50, 32.75. A test of 32.10, 32 is probable. Once an H1 price bar closes below 31.99, it may trigger the bearish scenario. The potential targets are 31.75, 31.50.
