The European Services PMI has shown unexpected growth. At the same time, Europe’s manufacturing production keeps shrinking. Amid public spending cuts and higher export the eurozone’s trade balance is showing a surplus, which is still lower than expected. As the rate of unemployment keep growing, European consumers’ confidence is slowing down. Today, the leaders of Germany, Italy, France and Spain are looking for the ways and means of resolving the eurozone crisis again in advance of the next EU summit, scheduled for the next week. According to the latest inspection, Spanish banks may need up to 62 bn euro of extra capital in order to survive when capital markets are closed for them. Any decisions to allocate extra funds may be hindered by the necessity of being approved by, for example, the Supreme Court of Germany.
The IMF President urged European leaders to be more decisive in their steps towards resolving the crisis in order to eliminate unnecessary threats for the common European currency.
In the meantime, the latest US economic stats suggest instability. In particular, jobless claims are growing in number once again, thus exceeding numerous forecast. Consumer confidence keeps going down.
China’s manufacturing production index has declined as well. This may suggest further economic stimuli in the near future. Such steps will become even more urgent if the eurozone crisis escalates further.
Asian dealers report about the revival of gold purchases in Hong Kong . However, the trading volume is too low to speak about a bullish tendency. Most experts assume that jewelers will wait till gold prices drop further down to 1520 or lower to resume purchases.
According to one of the possible alternative scenarios, gold may fall under the pressure of a economic slowdown in the USA, which in its turn may cause flight of capital from stocks and forced closure of all gold trades.
Today’s forecast:
According to the Commodity Trading Department of , gold will probably be stay in the 1550-1575 range. A test of 1585 is probable. A break and consolidation above 1585 will give way to 1600, 1605. The closest level of support is 1565. A break and consolidation blow 1565 will give way to 1550, 1525.
As for silver, it is expected to stay in the 26.50-27.0 range. However, if an H1 bar closes below 28.83, we may well see the price touching 26.50. 26.25. A break and consolidation above 27.0 will trigger the bullish scenario. In this case, 27.25, 27.50 will be the closest targets.
