recovery

The head of the OECD warned Monday that Europe needs to present a plan to involve private investors into the global effort to help Greece and give Athens time to deal with its problems.

"Time is critical, time is important to avoid a liquidity problem becoming a solvency problem. Time is of the essence also in order to allow for a recovery of everyone," Angel Gurria, head of the Organization for Economic Cooperation and Development, told reporters.

As US and UK prepare to release first quarter data next week many experts believe the reports will show very slack recovery of the two countries. The preliminary data on the US GDP will be reported on April 28, while Reuters believe it will be 2.0%.

Meantime, the UK will report its economic data on Wednesday. Economists believe that weak consumer demand will significantly impact the first-quarter report.

Prices of the bullion declined further on optimism about economic recovery in the United States and Europe. Meanwhile, rising oil prices can provide support and physical demand is also expected to gain traction after Lunar New Year celebration.

Investors awaited the European Central Bank's rate decision later in the day, but the U.S. non-farm payroll data due on Friday was likely to be the main focus, with hiring probably gathering steam in January.

Gold declined during Wednesday trades as rising equities and hopes for further economic recovery in the United States prompted some investors to shift to riskier assets, but lower prices could spur bargain hunting from jewellers.

The safe-haven appeal of gold was also dented by easing tensions in Egypt after President Hosni Mubarak said he would surrender power in September, offering a mixture of concessions and defiance to Egyptians who marched a million strong to demand his 30-year-rule end immediately.

Federal Reserve Ben Bernanke made a positive outlook for the US economy yet he stopped short of saying that everything will be super good through the year as jobless rates will unlikely contract substantially.

"We see the economy strengthening. It has looked better in the last few months. We think a 3 to 4 percent-type of growth number for 2011 seems reasonable," Bernanke said at an event sponsored by the Federal Deposit Insurance Corporation.

A new report from the US Federal Reserve published this week revealed that American economy strengthened by the year end. The Beige Book report showed a very bright picture of the US progress but it has made little impression on experts.

Federal Reserve reported better conditions across all 12 of its districts, though banking and financial services showed results that varied by region.

"Economic activity continued to expand moderately from November through December," the central bank said in a statement.

At an annual convention leading economists were making predictions for the near future of the US economy with outlooks being grey to say the least. 2011 may be a year of declining recovery as government support measures are contracting while in the long run the United States must face up to inevitably being overtaken by China as the world's largest economy. And it may have missed a chance to rein in its largest financial institutions, many of whom remain too big to fail and are getting bigger.

The move of the US Federal Reserve to inject more money into the economy could give its effects and contribute to inflation but the growth still will remain moderate through the next year, predict the group of analysts. The National Association for Business Economics (NABE) reported that its 51 members ranked inflation as a bigger worry than deflation. The survey was conducted between October 21 and November 4.

According to the latest stats the US economic recovery will be modest and slower than previously expected. The Federal Reserve Bank of Philadelphia's survey of 43 professional forecasters shows that the economy will grow at 2.2% annual rate in current quarter, down from the estimate of 2.8 percent three months ago.

As for the unemployment rate it was forecast to make up 9.6% in Q4 unchanged from the previous estimate. Meantime, forecasters downgraded the growth in jobs expected over the next four quarters.

Industrial nations risk spoiling the recovery after averting a severe depression two years ago, thinks a CEO of the world's largest bond investor. Mohamed El-Erian, head of Pacific Management investment Co., or Pimco, believes that if these nations are not careful they risk slipping into a lost decade of low growth, high unemployment and welfare destruction.

The top global financial organizations warned that the current approach adopted by world nations to protect their economies and weaken cooperation may lead to the replication of the previous mistakes and their consequences. World leaders must defuse currency tensions before they worsen to avoid repeating the mistakes of the Great Depression, the head of the World Bank said.

As claims billionaire investor Jim Rogers, chairman of Rogers Holdings, US needs to stop printing money and take on austerity measures like the Europeans did to let the economy recover. 

The UK pound dropped for a third straight day against the US dollar. The sterling also declined versus the yen after the Federal Reserve said yesterday the U.S. recovery will be slower than expected.

The pound fell as much as 0.6 percent to $1.5760 before trading 0.5 percent lower at $1.5778 as of 9:46 a.m. in London. It dropped 0.8 percent to 134.42 yen. Sterling gained 0.4 percent against the euro to 82.82 pence.

As French Economy Minister Christine Lagard stated last week, speaking about the prospects of euro zone crisis recovery: “We are in the middle of the beginning of the end."

Thus far, it’s too early to claim the end of the euro zone crisis has come; nevertheless, there some good signs that show Europe to may have turned a corner in its struggle to restore financial stability.

Jeffrey Lacker, President of the Federal Reserve Bank of Richmond, said that the US recovery is "sustainable" and the economy is unlikely to see another meltdown. He cited Friday employment report as evidence to that “the labor market is bottoming out.”

In March US non-farm payrolls increased 162,000 after February’s drop of 36,000. Jobless rate remained unchanged at 9.7% for the third consecutive month in accordance with the experts’ expectations.