The ECB left the key interest rate unchanged while Mario Draghi announced an unlimited bond purchase program. Therefore, the central bank is planning to buy risky short-term bonds (1 to 3 years). In exchange for purchases, debt-ridden eurozone economies will have to practice austerity.
In the meantime, the eurozone economy keeps fighting against the debt crisis and economic recession. The GDP shrank by 0.2% in Q2 2012. However, the latest decisions made by the ECB helped European and US stock indexes to exceed the local highs. Yesterday’s Spanish bond auction resulted in a yield decline.
Yesterdays’ US employment report came out better than expected, thus reassuring analysts and investors. The Services PMI report showed an increase as well. This suggests that the Federal Reserve still has no serious reasons for economic stimulation.
Asian dealers report about higher sales of secondary gold by individuals.
Today’s forecast:
According to the Commodity Trading Department of , gold may test 1703-1705. A break above 1705 will give way to 1715, 1725, or maybe even 1750. Alternatively, a failure to consolidate below 1705 will increase the probability of going up to 1690, 1675.
Silver is expected to test 32.70-32.75. A break above 32.75 will increase the probability of rallying up to 33.95-33.05 while a break above 33.05 will give way to 33.25, 33.50. Alternatively, a failure to stay above 32.75 will give way to 32.0 while a break below 32.0 may start a bearish move down to 31.75, 31.5.
