Forex-Metal Daily Analysis -18/05/2012

The Gold futures pulled back sharply in 2.41 % move to $ 1575 per ounce.


Asian and European trading sessions:

Euro: During the Asian trading session the EUR/USD pair tried to hold up the earned yesterday positions and traded around $1.275 area. All this was on the backdrop of news that the leaders of the Greek party were making preparations for coming in June elections, where will be decided the future of the country whether Athens will stay in Euro zone and get the next tranche of financial assistance or not. On the background the results of auctions of the Spain government bonds, the Euro fell to yesterday’s four -month lows against the dollar. Today, Spain placed bonds maturing in January 2015 in the amount of 372 million Euros in July 2015 in the amount of 1.024 billion Euros in April 2016 in the amount of 1.098 billion Euros. All three placements had the maximum yield which was caused by speculation that the financial crisis in Europe goes beyond Greece. The EUR / USD pair fell below $ 1.2700 and recorded the new low of $1.2667.

U.S. Dollar: The dollar traded lower at the Asian session on the background of yesterday’s publication of the minutes of the FOMC’s last meeting protocol which showed that some of Fed officials favored the further easing of monetary policy, if the U.S. economy will continue to slow.

British Pound: The GBP / USD pair traded in a range between $ 1.5904 -$ 1.5927 before resuming its major downtrend. The coming pressure after yesterday’s publication of the quarterly inflation report of the Bank of England, in which the British central bank raised its forecast for inflation and lowered perspectives for economic growth in the country, pushed the pound to new lows of $1.5790 in the GBP/USD pair. The expectations of the continuation of the Bank of England policy of quantitative easing program were increased among market participants today.

Japanese Yen: Amid speculation that on next week the Bank of Japan would increase the amount of incentive programs the yen weakened against most major currencies. The head of the Bank of Japan Mr. Masaaki Shirakawa noticed on today speech that the stability of the economy growth is very important. However, the USD / JPY pair changed its direction and fell steeply to the Y79.80 area by the end of European session.

Australian and New Zealand dollar: The Australian and New Zealand dollar strengthened their position today after the four-day fall on the background of taking profits by some of market participants.

American trading session:

Japanese Yen: The decline of stock indexes amid growing negative sentiment in the market supported the yen as the currency with the safe haven status. Against this background, the yen updated the 3- month high against the dollar falling to the Y79.12 level.

Gold: After reaching the 10- month low the Gold futures pulled back sharply and strengthened to the area of $ 1575 per troy ounce which is a 2.41 % up move from the last lows. All this was on the background of taking profit on short positions by investors. There were also rumors on market that the Federal Reserve System after yesterday’s FOMC meeting would likely to support the economy by next round of quantitative easing program.

Oil: The Crude oil futures rebounded today also from a six months minimums and attracted some buyers to the market. The cost of the June futures on U.S. light crude oil WTI on the NYMEX today rose by 0.16 % to $ 93.85, however did not go higher than that level and fell back to the $92 area along with the continuation negative sense on the markets.