Gold Weekly Fundamental Analysis for April 25-29, 2011

April 25-29, 2011 commodities weekly forecast for gold using graphs and indicators.

The strong run for gold is still seen after the metal finally broke through the psychological $1,500 barrier!

Gold extended the rise to a strong third weekly consecutive gain as the metal found strong demand despite the prevailing optimism over the state of the global economy and the rally for high yielding assets and equities.

Gold dominated the market on speculative, haven, and hedge demand which kept its race to the upside in steady motion. The dollar slumped heavily while oil returned to the upside keeping the metal a target for a hedge against inflation and a haven diversification from the dollar, especially as the rally remains under heavy uncertainty with more skeletons hidden in economy’s closets.

The euro surged to 15-month high despite its blurry fiscal outlook and growth disparities among member nations. Oil rose offsetting expectations for slower demand on high prices and the effect of ballooning inflation on slowing growth.

China continued to move to tighter monetary policies and inflationary figures were reported from the Pacific which kept the gold demanded as a hedge against inflation. The stability above the $1,500 is a strong signal for gains and surely high uncertainty.

The week ahead is to be very volatile for the metal especially as profit taking from the record has not been seen quite yet. The sentiment was the trigger on good growth and positive earnings yet the focus this week will return to GDP figures, inflation and the FOMC.

The FOMC meeting this Wednesday will be extra special with the decision early at 16:30 GMT and Bernanke to address the market with the new projects and feds insight at 18:15 GMT, similar to the ECB which will influence the movement directly and affect the metal, especially with Bernanke’s comments on inflation.

A strong downplay of inflation threats might be a trigger for the metal to decline amid fears of profit taking, yet still that does not alter the overall bullish outlook for the metal as seemingly more gains are just around the corner.

(Source: http://www.commoditiesmansion.com/fundamental-analysis/gold-weekly-fundamental-analysis-for-april-25-29-2011/)