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US Consumer Sentiment Fall and Gold Is Ready To Climb the Markets

This week, the macroeconomic news have focused mainly on two major nations: the United States and Europe. The most important news was revealed during the last days of the week and the EUR/USD exchange moved consequently.

Asian markets of China and Japan were closed due to the Chinese New Year holidays and the Japan National Foundation.

The data on retail sales and Michigan Consumer Sentiment index of the USA have been published on Friday.

The retail sales, calculated on a monthly basis and for the month of January, showed a growth higher than the consensus, increasing of + 0.2%, in line with the previous year. The retail sales of essential goods grew by + 0.1% and was in line with the data published the previous year.

The core version of this index raised more than expected and the previous year, increasing of + 0.4%. This data is very important because the Federal Reserve will have to decide if it has to rise or not the interest rates on March.

The markets celebrated the good US data, while the EUR/USD fell to -0.8% to $ 1.1231.

The (preliminary) index of Michigan Consumer Sentiment in February showed a decline compared to the expectations and the previous year with a value of 90.7 against 92.

This index assesses consumer confidence regarding personal finance, working conditions and the purchasing power on the basis of hundreds of telephone surveys. Surveys are based on a sample of consumers smaller than the Conference Board Consumer Confidence Index.

The decline in the level of consumer confidence usually accompanies any fall in income or salaries. A downhill in the result is considered an indicator of an economic downturn.

Talking about Europe, the most important indicators published was the (preliminary) GDP and the index of industrial production.

Eurozone GDP on a quarterly basis showed a growth in line with the consensus of + 0.3. The preliminary GDP on a yearly basis indexed to the fourth quarter, has also reached the expectations of + 1.5%.

The preliminary GDP figures show that the Eurozone is in contrast to the industrial production of the Old Continent which has been weak both on a monthly and yearly base instead.

Industrial production in Europe was by far the expectations. In December, industrial production downed by 1.3% compared to last year.

On a monthly basis, the Eurozone industrial production reported a 1.0% fall against the disappointing result of the previous month at -0.7% and expectations for a + 0.3% recovery.

At this point, it seems that the ECB’s intervention is very likely in March.

Gold, meanwhile, returned to shine on the global financial markets once again becoming the preferred safe haven asset for investors.

Year to date, gold has already chalked up a rise of 17%. The rally started from $ 1,060 an ounce and then it break through the threshold of $ 1,260 only to be a slight retracement in the area of $ 1,240 per ounce. We are on the highest level in almost a year. Next to the gold, even the silver moved sharply higher and it raised almost $ 16, top level by the end of last October.

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