The ECB is to publish its interest rate report. Some experts expect the central bank to cut the rates as the latest G7 summit was worthless in terms of resolving the eurozone crisis. In the meantime, the Spanish banking crisis keeps escalating because the capital market is unavailable to Spanish banks.
According to several representatives of the Federal Reserve, the central bank is not planning to stimulate the US economy in June. This statement is probably aimed at calming down financial markets, which have been anticipating further quantitative easing since last Friday’s poor employment stats. Yesterday, the USA’s Services PMI report came out better than expected.
Gold gained value a little yesterday amid expectation of further economic stimulation in the USA and Europe.
Indian dealers report that people started selling gold after the latest rally. According to the dealers, these sales are much more considerable than jewelers’ sales. Analysts anticipate an increase in secondary market sales in India up to 300 tons as compared with last year’s 130 tons. The consumption of gold is expected to decline by 4% this year. Higher duties have already resulted in a 20-25% decline in the demand for physical gold in the country.
Forecast
According to the Commodity Trading Department of , gold may well resume its rally up to 1645-1650, 1675. However, the price still may test 1620, 1617 during the trading day. A break and consolidation below 1616 will trigger a bearish movement down to 1600, 1585, and maybe 1575.
The closest levels of resistance for silver are located at 28.75 and 28.50. The price is expected to test these levels and to resume the rally up to 29.0, 29.25, 29.50.
If an H1 price bar breaks and consolidates below 28.40, it will probably trigger a bearish movement down to 28.25, 28.0.
