Gold Daily Outlook for April 6, 2011

Gold trading Tuesday was calm, as lack of major influential data from the US lured investors to target safety. Portugal’s suffered another downgrade by one-notch, this time by Moody’s Investors Services while putting the rate on review for further rate cuts on prospects that the nation may acquire a bailout from EU and IMF.

Inflation accelerated in Euro-Zone pushing traders to target gold to hedge against inflation. The sideway trading remains valid ahead of ECB’s rate decision (Thursday at 11:45 GMT), which would send the metal to fall as the bank is expected to hike rates to control inflation levels, causing the euro to drop and the dollar to gain, which accordingly, influences gold trading due to the inverse relationship the dollar holds with commodities.

The major influencing factor on the metal’s trading Tuesday would be the Fed’s Minutes report (18:00 GMT), which may reveal the bank’s outlook on the $600 billion stimulus plan that is scheduled to persist until June.

The dollar would fall if the purchases continued as plan, causing the metal to rise further, while any changes or withdrawal of the stimulus measure would cause the dollar to rise and the metal to fall.

Wednesday influential news on the pair will consist of the Industrial and Manufacturing sector’s performance in UK (08:30 GMT), along with the final growth estimate for 2010 fourth quarter (09:00 GMT) which is expected to show easing conditions in UK and the economy to sustain the same rate of expansion that was reported in the preliminary reading of 0.30% in the three months ending December and by 2.0% over a yearly basis.

Until Thursday, the metal is expected to sustain trading above 1,420.0 an ounce as investors take advantage of low prices, awaiting central bank’s decision on rates that would send the metal to decline further.

(Source: http://www.commoditiesmansion.com/commodities-news/gold-daily-outlook-for-april-6-2011/)