Yesterday’s eurozone external trade report came out worse than expected, thus showing deficit. Today’s focus is on the Spanish bond auction. It will hit ant Spain ’s chances to do without external help. On Sunday France will hold the first round of presidential elections, thus adding uncertainty to the market.
In the meantime, the US season of quarterly reports confirms investors’ confidence. The stock indexes keep rallying. However, IBM and Intel slightly disappointed investors. The US authorities continue public spending cuts and job cuts. Today’s US manufacturing production report is believed to come out better then expected by analysts. The markets will be waiting for tomorrow’s employment stats.
Japan’s trade balance turned out to be better than expected, even though it showed some deficit. The export grew by some 6%. The Bank of Japan is going to continue easing its monetary policy by all means.
The People’s Bank of China is also determined to provide China’s banking system adequate liquidity, including interest rate cuts.
Against this background, gold prices keep staying within a narrow range. The trading volume is one of the lowest since early 2012. The demand gold remains low.
According to the Commodity Trading Department of , today gold may test the 1647 resistance, and may be 1650. If an H1 price bar closes above 1649, the price will initiate a rally with probable targets at 1668, 1675. Alternatively, if the price closes below 1639 it will trigger the bearish scenario. If this is the case, 1635 and 1625 will turn into the closest major levels of support.
As for silver, a break and consolidation above 31.62 у will give way to 31.75, 32.0. Alternatively, a failed attempt to consolidate above 31.62 and a break below 31.48 will trigger the bearish scenario with probable targets at 31.25, 31-30.95.
