Fundamental Analysis

The increasing concerns over Europe’s debt woes are having a negative effect on the global growth. As a result, even the gold prices have started to experience a backward growth. According to the Managing Director of the International Monetary Fund, Christine Lagarde, the global financial growth is facing problems due to constant financial problems in Europe. As per recent reports, gold value has taken a tumble of about 8.8 percent this month (December, 2011). This is considered to be the first monthly loss since the month of September (2011). Debt issues and gold The European debt issues are weighing heavy on precious metal, gold. It is not only the value of gold that has fallen. In addition to gold, the value of oil too has fallen in the last few months of this year (2011). Along with the increase in the debt problems in Europe, the global economy too has slowed down a lot. According to David Lennox of Fat Prophets, the commodity...

Gold prices tumbled on Wednesday amid rising optimism around global financial markets, where traders were optimistic after Italy announced new austerity measures, which provided stock markets in Europe and the United States with strong bullish momentum, and accordingly, traders opted to invest in higher yielding and more risky assets, which put strong negative pressure on gold prices one day after rising to a new record high on Tuesday. We still preserve our bullish outlook for gold prices, where traders are likely to continue targeting safe assets including gold amid the huge uncertainty that continues to surround the outlook for global growth, especially since emerging signs suggest global growth is slowing, and that should continue to support demand for gold as a safe haven over the coming period. Moreover, traders will be focused on rate decisions from Europe, where the Bank of England and the European Central Bank are both expected to leave the benchmark interest rates unchanged, however, some traders are speculating...

Natural gas prices rose on Wednesday, as the National Hurricane Center signaled a storm in the Gulf of Mexico could develop into a cyclone, which raised concerns that supply of natural gas could be disrupted from the area, putting upside pressures on natural gas prices. Traders will be eyeing the EIA report for natural gas stockpiles on Thursday, while traders will be also watching the developments of the storm in the Gulf of Mexico. Thursday September 08: At 14:30 GMT, the EIA report for natural gas inventories will be released, where the EIA report is expected to show that natural gas inventories increased by 61 billion cubic feet, compared with the prior rise of 55 billion cubic feet.

Crude oil prices rose on Wednesday, as optimism spread through markets that President Obama will announce a new stimulus plan to support the labor market. Moreover, concerns from the European debt crisis eased after Italy announced new austerity measures. Also, traders were focused on a strong in the Gulf of Mexico that could disrupt oil supplies, which pushed crude oil prices higher. U.S. President Obama will announce a new stimulus plan to support the labor market, where the specific details of Obama’s plan will be released before the Congress on Thursday. Moreover, traders will be watching closely rate decisions from Europe, where the Bank of England and the European Central Bank are expected to leave interest rates unchanged. Traders will be also eyeing the EIA report for crude oil inventories on Thursday, since it was postponed due to the Labor Day Holiday earlier this week. Thursday September 08: At 12:30 GMT, the U.S. will release the trade balance for July, where the trade...

Crude oil prices rose on Tuesday, despite fears of a recession in the United States and slowing global growth, as traders were hopeful a U.S. economic stimulus plan will support economic growth, while supply concerns also contributed to the rise in crude oil prices after an oilfield was closed in China as a result of leaks, which is expected to increase China’s oil imports this year. The outlook for crude oil though remains negative, since the outlook for global growth remains somewhat bleak, and that could put negative pressure on crude oil prices over the coming period. Moreover, concerns from the European debt crisis could also weigh down on crude oil prices, as traders will most likely continue to target lower yielding and more safe assets. We should note that the EIA report which is usually released on Wednesday will be postponed to Thursday due to the Labor Day Holiday earlier this week. Wednesday September 07: At 18:00 GMT the United States will...

Gold prices fluctuated heavily on Tuesday while setting a new record high above $1900 an ounce amid the mixed sentiments that dominated global financial markets, where the Swiss National Bank announced it has set a minimum target for the Franc against the Euro, which supported confidence earlier in the day and pushed gold prices to drop. Nonetheless, gold prices rose back to the upside, as fears spread through markets over the outlook for global growth after data from Europe signaled economic activities was slowing down. We still preserve our bullish outlook for gold prices, where traders are likely to continue targeting safe assets including gold amid the huge uncertainty that continues to surround the outlook for global growth, especially since emerging signs suggest global growth is slowing, and that should continue to support demand for gold as a safe haven over the coming period.

Natural gas prices rose on Tuesday for the first time in three days on expectations of rising temperatures in the United States, which led to speculations of rising demand for power-plant fuel, and pushed natural gas prices higher. Traders will continue to follow the weather updates over the coming period. Moreover, signs of slowing economic activities in the United States could slowdown demand for natural gas and that could put negative pressure on prices.

Gold fluctuated heavily on Monday with the start of a new week, yet generally was still biased to the upside as losses were broadly seen across markets with Asia starting the week with reaction to the weak jobs report from the United States and Europe battered by the pessimism and deepening debt crisis. The debt woes in Europe and fears of another recession, especially in the United States, kept demand on gold as a haven evident, though was affected by the strong dollar and the fear of the high levels for the metal as investors start to feel the bubble burst for gold. The volatility is expected to prevail on Tuesday especially after gold stretched for a new historic high above $1,900 per ounce which will keep choppy and volatile trading evident. Investors from the United States and Canada will return from a long Labor Day weekend and the volume will return to the market and the sentiment will remain predominant with haven...

Crude started the week on Monday with continued bearishness to reverse the previous week’s gains on prevailing pessimism over the outlook for the economy. Fears of recession in the United States and slowing global growth are predominant and expect the downside pressure to prevail on the commodity after the selloff in equities seen on Monday. Despite the absence of U.S. markets on Monday still the Asian and European equities suffered heavy losses which reflected bearishly on commodities. Also Lee weekend to a depression from a tropical storm and production started to return with operations returning after the evacuation. The U.S. market will rejoin the market with the release of the ISM Services for August at 14:00 GMT and expected to slow to 51.0 from 52.7.

Natural gas futures started the day with tight range trading with the absence of U.S. markets on Monday for Labor Day holiday. Trading was pressured to the downside with the selloff seen across the board on rising recession woes with the downbeat data and the dollar maintained its strength keeping trading biased to the downside. On Tuesday we expect the downside pressure on natural gas to prevail after Lee weekend to a depression from a tropical storm and production started to return with operations returning after the evacuation. The U.S. market will rejoin the market with the release of the ISM Services for August at 14:00 GMT and expected to slow to 51.0 from 52.7.