Gold and silver prices started the first week of 2012 with sharp gains but by the end of the week they have changed direction and ended Friday’s trading with light falls. This shift in direction may have been stem, in part, due to the positive U.S. non-farm employment report. Currently, gold and silver are traded moderately up. Today, the German Industrial Production report will come out and the BOC Business Outlook Survey.
Here is a market outlook of precious metals prices for today, January 9th:
Gold and Silver Prices –January Update
Gold price slightly fell on Friday by 0.20% to $1,616.8; silver price also declined by 2.09% to reach $28.68. In the chart below are the normalized gold and silver prices of recent weeks (gold and silver prices are normalized to December 23rd). During January, gold price rose by 3.2% and silver price by 2.8%.
According to the recent U.S. employment report, the U.S. employment sharply grew again during December by 200,000 – the highest gain since September. As I have already analyzed in the recent gold price monthly forecast report, historically, as the non-farm payrolls inclined gold price tended to decrease; this correlation was mostly due to the effect this news had on the U.S dollar; the news of the sharp growth in the U.S. labor force during December may have been among the factors to pressure down gold price on Friday.
The table below shows the correlations between the news of the U.S. labor report and the daily changes in gold and silver prices.
German Industrial Production: this report will present the growth during November of Germany’s industrial production and could indicate the progress of the German Economy and consequently may influence forex traders;
BOC Business Outlook Survey: this quarterly report will provide an analysis of Canada’s businesses and offer some insight of what is up ahead for Canada (see here the previous report);
Forex Trading / Gold & Silver Prices – January
The Euro to U.S Dollar decreased again for the third consecutive day, on Friday it declined by 0.56% to reach 1.2717; other forex exchange rates such as the Australian dollar also depreciated against the U.S dollar. If major currencies will change direction and appreciate against the U.S. dollar, it may also pressure down gold and silver prices. Currently, the Euro/USD is traded up.
Current Gold and Silver Prices January 9th
The major precious metals are currently traded up in the European markets:
Current gold prices per ounce short term future (February 2012 delivery) is traded at $1,619.60 per t oz. a $2.8 or 0.17% increase as of 08:09*.
Current silver prices per ounce short term future (February 2012 delivery) is at $28.965 per t oz – a $0.282 or 0.98% increase as of 08:07*.
Gold and Silver Prices Outlook
Gold and silver prices started 2012 with sharp gains, but during the past couple of weeks gold and silver prices zigzagged with no clear trend. Today’s precious metals’ trading will probably revolve around the forex markets and the shifts in the US dollar may determine the direction of gold and silver prices. I speculate that if the Euro and Australian dollar will change direction and appreciate against the US dollar, it will eventually catch up with gold and silver prices and pull them up
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
11:00 – German Industrial Production
15:30 – BOC Business Outlook Survey
China’s Trade Balance
FOMC Members Speak
For further reading: