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"Gold reaching $1,330 USD by fourth quarter??..."
"Fourth quarter has been the best quarter for gold over the past eight years...."
Gold
will hit US$1,330 per ounce by mid fourth quarter, as economic
uncertainty increases and investors shy further away from equities in
the weeks ahead, says Ashraf Laidi, chief market strategist at CMC
Markets.
Having already hit a six-week high of US$1,226 per ounce, Mr. Laidi
says the combination of upcoming quantitative easing by the U.S.
Federal Reserve and Europe’s ongoing sovereign debt crisis, could be
the perfect catalyst for gold prices.
“Remarkably, the current gold rally could be especially powerful as
it combines the onset of further treasuries purchases by the Fed and
broadening questions about Eurozone debt, this time from Ireland,” he
said in a note to clients
In March 2009, the Fed’s announcement to introduce quantitative
easing was a boon to equities because the asset purchases were gauged
for the effect in dealing with the economic slowdown and not the cause,
Mr. Laidi said.
This time around, however, investors are more focused on the slowing
economy which is actually forcing fresh QE, and as a result, equities
are expected to suffer in favour of gold and other safe havens.
Mr. Laidi said the political uncertainty from US midterm elections
and growing talk of a potential Israeli strike on Iran could also fuel
the yellow metal past the $1,300 level. He noted that the fourth
quarter has represented the best quarter for gold over the past eight
years with 7 out of the last 8 showing positive percentage gains.
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"USD- Housing starts weaker in July"...
"CAD- Manufacturing sales rise in June..."
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Housing starts rose but to a much weaker rate than expected in July,
while permits for future home construction fell to their lowest level
in more than a year, according to a government report on Tuesday that
pointed to a weak housing market.The Commerce Department
said housing starts rose 1.7 percent to a seasonally adjusted annual
rate of 546,000 units. June's housing starts were revised to show an
8.7 percent fall, which was previously reported as a 5 percent drop. Analysts
polled by Reuters had expected housing starts to rise to 560,000 units.
Compared to July last year, groundbreaking activity was down 7 percent. New
building permits, which give a sense of future home construction,
dropped 3.1 percent to a 565,000-unit pace last month, the lowest level
since May 2009.
Manufacturing sales edged up 0.1 per cent to $44.8-billion in June.
Statistics Canada reports constant-dollar manufacturing sales rose 0.7 per cent to
$41.7-billion in June, 15.3 per cent higher than in May, 2009. Sales
gains were reported in nine of 21 industries, representing 50.1 per
cent of total sales. Today's report from Statistics Canada shows sales among manufacturers
have not gained in 11 of the past 13 months since the low of May 2009.
There are soft areas, of course. Just nine industries reported higher
sales posted increases in the month, which the federal statistics
gathering agency noted was offset by declines in 12 groups.
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| Currency Commentary
EUR, USD, CAD, GBP & JPY
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EUR: The Euro squeezed higher during European session breaking above
Monday's high at 1.2870 and extending the pair's recovery form
yesterday's low at 1.2730, to levels right above 1.2900, before failure
at 1.2915, which triggered a pull back to levels around 1.2850.
USD: Yesterday's gain in the USD..today...a reversal...weaker "Housing Starts" data along with commodities and equity markets on a positive swing...causing weakness on the USD. The question still remains, will the USD break into the 1.0500 to 1.0600 range or head down to the 1.0250 level?
CAD: News about Potash Corp. of Saskatchewan Inc, which rejected a $39
billion bid from Australian mining giant BHP Billiton LTD, has added
bullish pressure for the Canadian Dollar, already supported by
increasing risk appetite and higher energy prices..and once the U.S. equity markets open will this trend continue?
Currently the USD/CAD is heading south into the lower 1.0300 levels, great rates to buy the USD today.
GBP: The Pound gave up an intra-day high above 1.5680, after
bull's plans to move the price higher were put on hold. Instead, the
pair turned lower as the selling pressure eventually outweighed,
sending the Pound to hit a new intra-day low at 1.5607.
JPY: The Dollar is trying to extend its recovery from session low at 85.20
on European session, and , after brief consolidation between 85.20 and
85.45, the pair has broken higher, reaching session high levels past
85.50.
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| Technical Ranges
CAD, USD, EUR, JPY & GBP
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 USD/CAD
Support: 1.0267 Resistance: 1.0442
CAD/JPY
Support: 81.45 Resistance: 83.06
EUR/CAD
Support: 1.3227 Resistance: 1.3358
EUR/USD
Support: 1.2789 Resistance: 1.2966
GBP/USD
Support: 1.5556 Resistance: 1.5711
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| Main USD/CAD data today: |
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1. USD- Housing Starts data.
CAD - Manufacturing shipments data.
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