The Gold eventually rebounded to 1397 following a drop from 1565 the previous week to a more than 2-year low at 1322. Short covering induced the precious metal to pull back up approaching 38.2% Fibonacci retracement of 1565 to 1322, at 1415.
Eurozone CPI data was slightly higher than expectations as the EZ annual core inflation for March was at 1.5%, 0.1% higher than projected and up from 1.3% in February while ZEW Economic Sentiment unexpectedly dropped to 24.9 for April from 33.4 the previous month . The common currency advanced from 1.3042 towards 1.3134 in the intraday, spiking to 1 ½ month high at 1.3146. However was recently capped as IMF cutt EZ growth from 0.5% increase to -0.3%. The IMF sees contraction increase in Italy to 1.5% compared to 1% projected in January, Spain to -1.6% down from -1.5%, France will also contract instead of growing projections in January, pressuring ECB to further enhance monetary policy, as there is still room for lower interest rates and use asset purchases.
Concerning global economy the IMF said will expand by 3.3% in 2013 instead of 3.5% projected in January and reduced expectations for China, India and Brazil growth. Additionally, for the US economy also reduced growth projection to 1.9% for 2013 from 2.1% in January. US annual CPI (all items) was at 1.5% in March, 0.1% lower than forecast and down from 2.0% the previous month, decreasing chances for QE withdrawal. All that, set pressure on the US dollar index that inched to 81.96, however positive US Housing Starts and Industrial Production supported the greenback.