Yesterday’s PMI reports showed an improvement in the eurozone’s service sector. However, the retail sales report disappointed investors with a 0.1 decline.
Spanish bond yield increased up to 5.6% yesterday during the bond auction. This is the highest yield in 3 months. This factor makes investors go nervous about Spain ’s sovereign debt. On the other hand, as the German rate of inflation keeps growing, the ECB is urged to diminish or stop the financial support for the liquidity of European banks. The ECB left the key interest rate unchanged yesterday. It seems like Spain will be the major market driver in the European market.
The eurozone’s aggregate gold reserves have gained in price to make €432,705bn. The currency reserves have shrunk by €2.24bn down to €228.1bn.
The US rate of employment grew once again yesterday. However, the Services PMI report came out worse than expected. The US service sector accounts for 67% of the US GDP. Experts anticipate housing prices to drop 3.7% this year.
China’s Services PMI report showed a decline. Today Chinese markets are open for trading after holidays. The markets opened with a rally. Analysts say that the People’s Bank of China may start another round of quantitative easing this month.
Today is the last trading day before a prolonged weekend. That is why today’s trading sessions may be attended by higher volatility and profit-taking.
According to the Commodity Trading Department of , gold may well stay within the 1620-1637 price range. If an H1 bar closes below 1620, it will probably trigger the bearish scenario with targets around 1614, 1600, and maybe even 1563, 1550. A break above 1626 may start a rally up to 1636, 1645, 1650.
As for silver, it may stay in the 31.25-31.65 range as well. A break below 31.20 will give it an chance to continue the bearish movement down to 31.0. A break below 31.0 may trigger a further downswing down to 30.50, 30.0-29.90, and maybe 29.50-29.45. A break above 31.65 opens the way to 32.0, 32.35.
