China has doubled the daily deviation range in the market of its national currency. Now the Chinese Yuan exchange rate is allowed to deviate by 1% within a trading day. This may hint at the Chinese government’s confidence in stable economic growth. At the same time, investors have been cautious since Friday’s Chinese GDP report, which came out worse than expected.
The Spanish T-bond yield increased on Friday once again. The next Spanish bond auctions are scheduled for April 17th and 19th. EU officials will visit Washington this week in order to persuade the US authorities in backing the expansion of the IMF reserves in order to help the eurozone. This won’t be easy. Canada has already refused to participate in the program. The US seems to be unwilling to provide extra financial support as well.
The market of physical gold is currently seeing lower demand. In terms of seasonality, gold dealers expect the demand for gold to recovery in August. However, this month India may resume gold purchases in connection with holidays.
The first round of the nuclear talks between Iran and the Western alliance ended with an agreement to resume the talks. The next round will be held in Baghdad on May 23rd 2012. The US Administrations warns that this will be Iran’s last chance to resolve the issue. If there is no breakthrough, Iran may face even tougher sanctions.
Forecast:
According to the Commodity Trading Department of , today gold continues weakening. The closest level of support is 1647-1645. Once an H1 price bar closes below 1645, this will give way to 1635, 1633, 1625, and maybe even 1610. The closest level of resistance is 1650-1652. In order to resume the rally, the price will have to consolidate above 1660.
As for silver, it is seeing a downtrend as well. A break and consolidation below 31.20 will give way to 30.50, 30-29.90. Alternatively, a failure to consolidate below 31.20 may trigger a flattish movement within the 31.20-31.50 price range. A break and consolidation above 31.40 opens an opportunity to hit 31.60, 31.90.
