Gold Trading Week Ahead - 7 April 2015

By: Harley_Salt

Gold has started the new week on a positive note after disappointing U.S. March Non-Farm Payroll data showed a rise of only 126,000 versus an expected gain of 245,000. We have now seen two months of disappointing jobs data out of the U.S, the latest setback adds further weight to the view that the Fed will be hesitant to raise rates any time soon. The uncertainty and low interest rate environment is good for safe-haven assets such as gold.

This week we see a handful of key events that are set to drive the gold market. On Tuesday we have the Reserve Bank of Australia (RBA) holding its monthly rates meeting, futures markets are pricing in an 80% chance of a rate cut. If the RBA does cut rates to 2%, it will be the lowest level seen in Australia since the 1950’s. A rate cut should provide good support for gold priced in Australian dollars. If the RBA does not cut rates on Tuesday it will almost certainly will at its May meeting.

The FOMC minutes from the March meeting will be released on Wednesday, again investors will be looking for any hints as to when the Fed will pull the trigger on rates.

Thursday sees the Bank of England meet however no change is expected, while later in the session we will see the release of the U.S. Initial Jobless claims. As we know the employment data out of the U.S. has been very weak of late so further weakness is going to put pressure on the US dollar while boosting the demand for gold.   

On Friday the big data to watch is the China CPI for March, it is expected to drop to 1.3% after it rose to 1.4% in February on the back of higher prices over the Lunar New Year. Consumer inflation in China is expected to remain subdued in the short to medium term.
Gold is expected to test the US$1,220/oz resistance level this week. Gold investors are looking for gold to consolidate above this level before moving higher.

Courtesy of:  www.BullionIndex.com.au 

Harley Salt is co-founder of www.BullionIndex.com.au a physical gold, silver and platinum trading and investing company located in Melbourne, Australia.

Bullion Index offers direct market access to 15 global physical bullion exchanges and storage facilities in key locations including London, Zurich, New York, Hong Kong, Singapore, Dubai and Sydney. Their clients from across the globe can trade bullion bars and investment grade coins simply and securely via the MetalDesk online trading platform.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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