Yesterday’s German trade balance report came out better than expected, which confirms that Germany remains the eurozone’s leading economy. Investors are reassured and keep investing in German bonds while dumping the bonds emitted by other eurozone countries.
Yesterday the eurozone’s stabilization fund approved another loan to Greece (5.2B euro) despite the uncertainty seen after the elections. Greek politicians keep looking for ways of forming a new government in order to avoid new elections. In the meantime, both eurozone politicians and common people start discussing the possibility of Greece leaving the eurozone. The uncertainty in the euro area escalated after the nationalization of Bankia, Spain ’s 4th biggest Spanish bank and the major Spanish lender in the housing market.
In the meantime, the US trade balance report is expected to show a bigger deficit. The amount of unemployment claims is expected to increase as well.
China’s external trade turnover in April increased less than expected. The export boosted by 4.9% against the forecast (8.5%) while import increased by 0.3% against 10.9% anticipated by analysts. Investors are disappointed by these data despite April’s surplus.
The Japanese Yen keeps gaining value as investors are looking for safe haven assets. Japan’s balance-of-payments report came out better than expected, thus showing a surplus.
Asian dealers report about much higher demand for physical gold after a decline below $1600/oz.
Forecast.
According to the Commodity Trading Department of Masterforex-V academy, gold is rallying up to 1604-1606. If an H1 price bar closes above 1607, the price may well rally further up to 1625-1630. A break and consolidation below 1590 will trigger a downswing with probable targets around 1575, 1550.
As for silver, we expect it to test the 29.50 resistance. If an H1 bar closes above 29.50, it will give way to 29.75, and maybe 30.0. A break and consolidation below 29.10 will trigger a downswing with probable targets at 28.75, 28.50.
