After the gold could record a new high at 1574$ in the beginning of the week, it has eased back following the news of killing Bin Laden by the US forces in Pakistan but the focusing got back on the Greenback interest rate outlook to be under pressure again after dragging the gold down below 1540$ to be traded currently near 1570$ per ounce.
The pressure has accelerated recently on the greenback after the Fed's recent meeting and Ben Bernenke press conference which did not come with new to the market concerning the US economy as the Fed is still appreciating the growth down side risks impacts on the labor and the housing market which is still depressed downplaying the inflation upside risks which can be transitory with impact on the underlining inflation over the long term and this direction can be maintained as we have seen in April a marginal easing of the US ISM manufacturing pace of expansion to 60.4 from 61.4 while the market was waiting for falling below 60 to 59.5 and this figure came after better than expected figure of April Chicago manufacturing PMI by the end of last week at 67.6 while the market was waiting for 67.1 from 70.6 in March to show that there is no negative worrying implication dampening the demand in the US manufacturing sector yet despite the rising of the commodities and oil prices which can give the conclusion that the easing period can be extended spurring the investments undermining the greenback by God's will.
As the market has seen in this assessment further readiness of the Fed for having longest possible period of easing enduring coming inflation pressure from the rising of the commodities and energy prices which can give rooms for the greenback to fall with no expected action from the fed soon for containing the inflation underpinning the greenback and the that was the reason of rising the gold to these current new highs leading the silver to make unprecedented performance rising in the beginning of last week to 49.78 as a hedge against inflation and in the same time versus the geopolitical concerns with mixed military position in labia underpinning the oil prices threating the supplies from the middle east and even after the gulf countries pledges of compensating the Libyan supplies, it costs more to the European comparing to Libya specially to Italy which has 35% of its needs of gas from it.
God willing, the market focusing will be turning this week on the US labor market as the Fed's considering block against taking tightening steps and we have seen last Thursday dramatical rising of the US initial weekly jobless claim to 429k from 404k a week earlier while it was expected to ease to 390k as we are wait this week for April ADP non-farm employment change to be 200k from 201k in March and also the US labor report by the end of it to have decreasing of US non-farm payroll of April to 183k from 216k in March keeping the unemployment rate at 8.8% as it was in March.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail:
mail@fx-recommends.com
http://www.fx-recommends.com