GOLDEN ACADEMY

Industrial Production Index (IPI) is the physical quantity index of industrial products based on weighted arithmetic average, which is an index commonly used in western countries to calculate and reflect the speed of industrial development as well as the business climate analysis. IPI is based on the production volume of the representative product. Dividing the reporting period by the base period to obtain the individual index of the product output, then use the industrial added value to calculate the weight to calculate the overall index. Therefore, the calculation of product added value in IPI is the key to the calculation of weights.

Higher IPI represents more favorable economic condition and higher interest rate, thus bullish for USD and bearish for gold. Lower IPI is, correspondingly, bullish for gold.

Purchasing Managers' Index (PMI) is usually shown in percentage, with 50% being the dividing point between economic growth and decline. With the index reading higher than 50% indicates as a signal of economic expansion, thus bullish for USD and bearish for gold. On the other hand, an index reading lower than 50%, particularly extremely close to 40%, indicates the risk of economic depression. Generally, this is when the Federal Reserve Board would probably lower the interest rate to stimulate economic growth. In that case, it is bearish for USD and bullish for gold.

An increase in this data indicates improvement in the manufacturing industry, which is bullish for USD and bearish for gold. On the contrary, a decrease indicates contraction in the manufacturing industry, which is then bearish for USD and bullish for gold.

Issued at the beginning of a month, the Employment Rate is usually used as the keynote of economic indicator for current month. Among them, the non-agricultural employment population is the important information for estimating industrial production and personal income. A decrease in unemployment rate or an increase of non-agricultural employment indicates a rising prosperity and higher interest rate, being bullish for USD and bearish for gold. Otherwise, it is bearish for USD while bullish for gold.

In general, higher PPI is bullish for USD and bearish for gold while lower PPI is bearish for USD and bullish for gold.

An increase of retail sales indicates an increase in personal consumption expenditures and better economic growth. If interest rate is expected to rise, it is bullish for USD and bearish for gold. On the other hand, a decrease of retail sales indicates the economy is slowing down or not very good and the interest rate may be cut, which is bearish for USD and bullish for gold.

Consumer Price Index (CPI) is one of the most commonly used price index in the discussion about inflation. Higher CPI suggest a possibility of inflation when the central bank may impose control by raising the interest rate, which is bearish for USD and bearish for gold. On the contrary, lower CPI is bearish for USD and bullish for gold. However, as lots of products related to daily life are final products, the price tends to go up instead of falling, thus CPI could not completely reflect the actual condition of price changes.

Changes in residential construction directly indicates economic decline or recovery. Generally speaking, an increase of housing starts and building permits is theoretically bullish for USD while bearish for gold. A decrease of housing starts and building permits or fewer housing starts and building permits then expected will impose pressure on USD while become bullish for gold.

This data is divided into initial application and continuous application. Apart from the weekly figure, the US also publishes a four-week moving average to reduce volatility of the figures. Changes in jobless claims is one of the most watched economic indicators/ The US is a completely consumption-oriented society with consumption intention being the biggest driving force of the economy. Increase of weekly jobless claims might restrict consumer confidence, which is bearish for USD and bullish for gold. Lower jobless claims indicates an improvement of the labor market, suggesting better prospect of economic growth, which is bullish for USD and bearish for gold.

Changes in the weekly US API (American Petroleum Institute) crude oil stock will affect the international crude oil price. Theoretically, a decrease will result in higher price, which is bullish for gold, while an increase will result in lower price, which is bearish for gold.

Consumer consumption accounts for 2/3 of the American economy and is of great significance on the US economy. Therefore, analysts track CCI to predict future consumers expenditure. Steady increase of CCI indicates optimistic future income expectation and a sign of expansion in expenditure, which is bullish for economic development as well as USD; otherwise, it is bearish. CCI is published twice a month respectively at the beginning and the end of one month.