This week the leaders of France and Germany are meeting to work out a plan for the revival of the eurozone economic growth in advance of the next EU summit scheduled for May 23rd. The G8 summit revealed some disagreements. As a result, the G8 just urged Greece to stay in the eurozone without offering any efficient salvation plan.
Greece is to conduct another round of parliamentary elections on June 17th. Amid the eurozone instability, the Spanish bond yield keeps growing while the Prime Minister of Spain has addressed the EU authorities to get access to the market of capital.
China keeps betting on higher inflow of foreign investors. The Chinese government promised to accelerate the process of endorsement for those investors who are interested in purchasing Chinese bonds and securities.
The Japanese Yen weakened as there are fears that the Bank of Japan may initiate a series of currency interventions this week. Tomorrow the Japanese central bank is to hold a meeting. The trade balance report is expected to show a more substantial deficit increase (¥470.8B against ¥84.5B a month before).
The Asian demand for physical gold, which emerged after breaking below 1550, weakened once again after a break below 1600. Gold price have been growing since Wednesday. The major reason is that investors expect the Fed Reserve to start another round of quantitative easing.
According to the Commodity Trading Department of , today gold will probably be testing 1613, 1625, and maybe 1630. Today’s levels of support are 1592-1589. A break and consolidation below 1589 will trigger the downward scenario with targets around 1575, 1558.
As for silver, on consolidating above 28.75, the price may test 29.0, 29.25, 29.50. A failure to consolidate above 28.75, and a break below 28.60 will give way to 28.50, 28.25, 28.0.
