Last week gold and silver prices started off the week with little movement, but by Thursday both precious metals tumbled down after the testimony of Bernanke didn’t deliver in relaying whether another QE program might be issued in the near future. In Europe many anticipate for next Sunday’s Greek elections and how this round might affect Greece’s chances of it leaving the EU. Over the weekend Spain announced it will ask for nearly 100 billion euros from the EU. Will this bailout help sustain the liquidity problems the Spanish banks have is remain to be seen. This news may continue affecting not only the forex markets, but also bullion markets. This upcoming week there are several reports on the agenda that may affect gold and silver prices. The main events will revolve around Spanish bailout, U.S retail sales and U.S PPI & CPI monthly updates.
Here is a short forecast for June 11th to June 15th; this includes a short description accompanied with a fundamental analysis of the main news, publications, and public speeches that may influence metals traders.
Gold price slipped during the first couple of days of the week but tumbled down on Thursday. During last week it fell by 1.89%; Silver decreased on a weekly scale by 0.14%.
In Europe there is still a lot of speculation around the recent developments in the European debt crisis, most notably the recent Spanish bailout for Spain’s banks that were facing liquidity problems. This bailout will likely to keep occupying the news cycle and thus may keep affecting the forex markets during the upcoming week.
The Euro changed direction last week and rose again against the U.S dollar by 0.66% (on a weekly scale); furthermore, other “risk” currencies such as the Australian dollar and Canadian dollar also sharply appreciated against the U.S dollar by 2.24% and 1.39%, respectively. The recent rally in the Euro/USD and AUD/USD may have been among the factors to curb the decline in gold and silver during the first few days of last week. If these currencies will continue to trade up, it could further maintain bullion rates high.
In the video below there is a broad overview of the main publications and reports that may affect gold and silver prices between June 11th and June 15th. Some of these reports and speeches include: ECB President speech , U.S retail sales report, U.S consumer price index, U.S PPI, China’s new loans, GB manufacturing production, EU CPI, U.S federal budget and U.S. jobless claims weekly update (just to name a few).
In conclusion, I speculate precious metals might continue to dwindle during the week and their direction will mostly rely on the movements in the foreign exchange markets mainly the Euro, Aussie dollar and Canadian dollar. The recent developments in Spainand the anticipations for next week’s Greek elections and FOMC meeting may keep bullion traders on the edge of their seats; until then bullion rates may continue to move with an unclear trend. The upcoming reports regarding the U.S including the retail sales, CPI, PPI and jobless claims update, could affect not only the USD, but also gold and silver prices: if the U.S reports will continue be positive or at least meet expectations it could further push up precious metals. IfChina will continue to show slowdown it could also adversely affect commodities markets. Finally, the upcoming bond sales, mainly in the U.S could signal the market sentiment for risk and thus may indirectly affect bullion rates.
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