Gold Daily Fundamental Analysis for May 23, 2011

Gold continues to be pressured by the volatile market sentiment and the shaky conditions across commodities markets, which accordingly is holding gold a prisoner to the dollar.

On Friday, gold marginally moved higher of the day to only surrender the losses on a strong dollar comeback and amid the lack of data, where investors turned pessimistic over the state of the global recovery, fueled by Budesbank’s monthly report that saw Germany’s growth slowing into the coming quarters after a strong start.

The German projections for slowing expansion was the last straw, where the nation has been enjoying a steady recovery and is leading the expansion in the euro area as well, and shall the economy slow, it is an added downbeat signal on a slowing global recovery.

Fears over the outlook continue to provide the dollar with the bullish momentum which surged strongly on Friday on the back of intensified risk aversion amid the bleak outlook. Gold is still trading under a dollar realm and although the fundamentals are more supportive for haven demand on the metal its vulnerability to the dollar and liquidations on the heavy selling are pressuring the metal.

The sentiment with the start of the week on Monday will be still concentrated on growth especially with Germany and the United States to release the second estimate for the first quarter GDP.

Source: http://www.commoditiesmansion.com/fundamental-analysis/gold-daily-fundamental-analysis-for-may-23-2011/