Factors Affecting Gold for May 8, 2014 - Gainesville Coins News
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Factors Affecting Gold for May 8, 2014

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Factors Affecting Gold for May 8, 2014

confusedWhat Happened Yesterday?

Russian President Vladimir Putin caught the world by surprise on Wednesday, when he announced that the Russian Army would be pulling back from the border with Ukraine, and asked separatist forces in eastern Ukraine to hold off on a planned referendum this weekend to determine if the province of Donetsk Oblast should join Russia.

A lesser factor was Fed Chair Janet Yellen before Congress, telling the banks the words they want to hear regarding near-zero interest rates.

What's Up For Tomorrow?

First-time Jobless Claims

This is the report of last week's freshly-fired workers who have filed for unemployment. Forget Yellen or the ECB, this is the report most likely to move markets tomorrow.

What to Expect

The expectation is that 14,000 fewer people got a pink slip last week, meaning "only" 330,000 new people are unemployed

Effect on Gold

Substantially lower numbers here will boost stocks, pulling oxygen from the precious metals.

Ukraine, still

Putin's move is a reset of the international situation. What happens now?

What To Expect:

The whole situation is now up in the air. If the Ukrainians can stop killing one another for a few days, who knows what could happen?

Effect On Gold:

Today's announcement by Russia basically erased the "safe haven" factor in recent gold prices.

Yellen Speaks to Congress (again)

Fed Chair Janet Yellen will speak before Senate Budget Committee, which, be a re-run of Wednesday, unless Elizabeth Warren or conservative Republican Senators ask the questions their constituents want answered.

What To Expect

Same as yesterday, unless she goofs, everyone knows what she's going to say.

Effect on Gold

Speculators may take the excuse of Yellen's testimony as an excuse to close out positions.

Bank of England Policy Meeting

This is the Bank of England's version of the Fed's FOMC meeting.

What to Expect

The UK's economy is rocking right along, compared to most of its continental neighbors, so everyone expects the BoE to stand pat on interest rates.

Effect on Gold

The pound sterling is even stronger than the euro, but gold demand isn't super heavy in Old Blimey. The biggest effect it will have on gold is weakening the dollar.

European Central Bank Policy Meeting

This is the ECB's version of the Fed's FOMC meeting.

What to Expect

ECB president Mario Draghi feels that recent numbers have given him leeway in postponing any outright QE measures to combat disinflation. Analysts are pretty much in the same boat.

Effect on Gold

The euro has the biggest affect on the DXY dollar index, but Draghi desperately wants the common currency to stop being so strong. He's going to do a lot of talking to get people off the euro bandwagon so that EU exports won't suffer. A stronger euro is very slightly bullish for gold.

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