comex gold intraday

Gold Outlook July 17, 2008
17 July 2008 12:40:23



A better-than-expected industrial output data from the US and an unexpectedly large increase in US inflation helped the greenback to recover moderately.

According to the data released by the Federal Reserve on Wednesday, output of US factories, mines and utilities increased 0.5% in June, following a 0.7% drop in April and a 0.2% decline in May. But for the quarter as a whole, industrial production was down at a 3.1% annual rate.

The US Labor Department reported that the nation’s Consumer Price Index rose 1.1 % in June to an annual pace of 5.0%, underscoring the Fed concerns about rising inflation and sluggish growth.

Meanwhile, the National Association of Home Builders/Wells Fargo Housing Market Index fell below its previous record low of 18 in June to a new record low of 16 in July, indicating a fall in builder confidence in the US market for newly built single-family homes, for the third consecutive month.

Federal Reserve Chairman Ben Bernanke had said Tuesday that the US economy is facing significant risks to growth. He also urged that Fed must remain particularly alert to any sign that inflation is getting out of control.

The US government's rescue plan for mortgage giants Fannie Mae and Freddie Mac heightened fears about the financial market. On July 13, the government had announced bailout for the two GSE’s (Govt. Sponsored Enterprises).

Oil price continued the previous day’s sharp fall, making a combined loss of over $10 on closing basis in two days, the biggest two-day drop in more than 17 years. A surprise rise in US crude inventories, concerns that slowing economic growth might dampen oil demand and OPEC’s downward revision of world oil-demand growth for 2008 and 2009 affected oil.

Meanwhile, the US trade gap narrowed unexpectedly in May. The US Commerce Department reported a 1.2 % decrease in trade deficit in May to $59.8 billion deficit from the revised $60.5 billion in April.

In economic data released last week, the US Labor Department said initial jobless claims in US fell by 58,000, the largest one-week decline in more than two years, to 346,000 for the week ended July 5. The four-week average of initial claims recorded a decrease of 10,000 from the previous week to 379,250. However, continuing claims rose by 91,000 to reach 3.2 million for the week ended June 28. The four-week average of continuing claims also rose, up 16,500 to 3.13 million, the highest since 2004.

The unemployment rate in US remained at a four-year high of 5.5% in June, according to the release by the Labor Department.

Meanwhile, the US Commerce Department in its final revision to GDP estimates said that the economy grew at a slightly faster pace in the first quarter than originally reported. Real GDP was revised to a 1.0% annual rate in the first three months of the year, up from an originally reported reading of 0.9%.

The US Consumer Confidence fell in June to a 16-year low. According to Conference Board, June consumer confidence index fell to 50.4 from a reading of 58.1 in May.

The recent data from various sectors in the US have given rather mixed hints regarding the economy.

Weekly Outlook (Spot Gold)

Continuation of uptrend expected above $969.30. Resistances are $978, $988, $1002; Supports $955, $947, $940.

Last day DGCX Gold Aug traded in the range $982.30 – $958.90 and closed at $961.10 ($974.30).

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 958.70; bearish below $ 953.50

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