YEREVAN, July 15./ARKA/. Gold prices reached record two-week high of 1,298.79 USD per troy ounce last week. The highest increase was demonstrated on Wednesday, July 10, after FOMC published its last session protocols which implied the Board members don’t agree on the exact time for program termination. Later that day, chairman Ben Bernanke said ultra soft monetary-credit policy would be maintained in the near future.
Thus, investors could relax and increase long-term positions. Favorable consumer prices statistics from China and weaker USD have also prompted hikes in gold prices. As a result, the gold prices rose by 5.46% to 1,285.24 USD per troy ounce.
This week, gold prices are also expected to be high amid the optimism around the monetary-credit policy. The further situation will depend on labor statistics from the US.
The dynamics of gold prices may depend this week on the speech by Mr. Bernanke on economy and monetary policy in the Congress. Even though last week he said the QE3 will be maintained, in his official statements in the Congress, Mr. Bernanke may clearly indicate the exact termination period of the program. If he implies the termination will start this fall, gold prices may tumble. Otherwise, the quotes may go on with hiking. The resistance benchmark this week may be 1,335.0 USD per troy ounce.
The gold dynamics may also depend on the macroeconomic statistics from the USA and eurozone. Of the American news we should focus on retail trade, industrial output and consumer price index for June. Of the European news we should highlight business sentiment index in Germany published by ZEW for July and consumer price index in the eurozone for June. If the forecasts come true and inflation rates in the USA and eurozone are higher than predicted 1.7% and 1.6% respectively, the gold prices may go on climbing.
However, if this statistics is worse than expected, the gold quotes may slightly down. The supporting benchmark for gold this week may be 1,240.0 USD per troy ounce.
Copper prices upped by 2.69% to 3.1510 USD per pound amid optimism after Federal Reserve’s last meeting and Mr. Bernanke’s statements. Moreover, strong copper import of China have also supported the quotes. The import to China rose by 5.9% to 379951 tons in June.
In addition, copper reserves at Shanghai Futures Exchange fell by 4645 tons to 168376 tons, thus stabilizing the copper prices.
This week, the copper price dynamics will mainly depend on macroeconomic statistics from the USA and China. As to China, it is important to know GDP rate for the second quarter, industrial output and retail trade for June. As to the USA, it is important to focus on industrial output and real estate market for June. Chinese statistics is expected to be negative, whereas the US one will be half negative half positive. As a result of this, the copper prices may descent to 3.05 USD per pound.
However, if against the forecasts, the macroeconomic statistics from these both countries is positive, the copper quotes may increase to 3.25 USD. Mr. Beranke’s statements to be made in the Congress are also of the utmost important here.
Mikael Verdyan, an analyst at FOREX CLUB, specially for ARKA news agency.
The opinion of the author does not necessarily reflect that of the agency.—0-
