Gold Fundamental Analysis for April 15, 2011

Gold rose in trading Thursday as the dollar remained weak against majors excluding the Euro. The dollar continue to support the rise of commodities due to the inverse relationship between the two, while another contributor to the rise is inflation levels that continue to accelerate in europe.

Investor’s eye Chinese data at 02:00 GMT with the GDP expected to have expanded by an annual 9.4% in the first quarter slowing from 9.8% while inflation might have rose in March to 5.2% from 4.9%. Weaker growth and rising inflation will fuel bets for further tightening and that will increase risk aversion and jitters prompting the metal to ascend further as investor’s hedge against inflation.

Inflation data from the Euro-Zone will be released at 09:00 GMT, which may pressure the pair to ascend, while Portugal’s bailout issues may cause the pair to depreciate where Finland’s Anti-euro parties are gaining momentum and that intensified fears that the parliament might block Portugal’s request for EFST bailout, where the nation is the only of the governments that needs parliament approval to pass the loan opposed to other nations that the government provides.

The US at 12:30 GMT will release Consumer Price inflation and expectations are for inflation to have risen by 2.6% on the year from 2.6% and core inflation to remain well contained at 1.2%. Empire Manufacturing is awaited at the same time and expected generally stable in expansion at 17.00 from 17.50.

Further bullishness is expected as inflation expectations have moved to the upside, accordingly, pushing gold higher as a haven for wealth preservation. A correctional move may occur in trading, but with minimum effects on the metal where investors may seek to take profit from elevated prices and sell the metal to obtain profits.