Gold and Silver Prices Outlook for July 8-12

During the previous week, gold and silver prices continued their downward trend even though they have started the week on a positive note. Their fall coincided with the weakness of leading currencies such as Euro and Aussie dollar that depreciated against the USD during last week. Following the release of the U.S non-farm payroll report, in which 195k jobs were added, more people suspect the Fed may taper QE3 in September or December 2013; this will slowdown the growth of U.S money base and consequentially further lower the demand for gold and silver as safe haven investments. The next FOMC meeting that at the end of July might shed some light on this issue. Moreover, during last week, ECB and BOE left their respective cash rates unchanged. The ECB president and BOE governor hinted that they may keep rates low or slash them in the coming months. These headlines were enough to pull down the Euro and GB pound against the USD.

Will gold and silver keep their freefall this week?  Here is a short outlook for July 8th to July 12th; this includes a fundamental analysis of the main reports, and publications that may affect bullion markets. These include: ECB president speech, minutes of   the FOMC meeting, Bernanke’s speech, Germany’s industrial production, U.S PPI, BOJ monetary policy meeting, Australia’s employment report, China’s CPI, and U.S. jobless claims.     

During last week, gold slipped again by 0.91%; furthermore, the average price reached $1,240.93 /t. oz which was 0.19% below last week’s average. Gold ended the week at $1,212.7 /t. oz.

Silver price tumbled down during last week by 3.71%; conversely, the average weekly rate was $19.32/t oz, which was 1.06% above last week’s rate.

Herein is a short overview that outlines the main publications, events and decisions that may affect gold and silver next week between July 8th and July 12th. Moreover, the video below shows a breakdown of the events that will come into play during next week any may affect the direction of precious metals.

Based on upcoming events and latest developments, gold and silver prices might further fall. The sharp decline of both gold and silver prices at the end of the week might lead to a correction at the beginning of the week, but the general downward trend may persist. The upcoming publication of the FOMC meeting and Bernanke’s speech could affect precious metals markets if either of these events could shed some light on the Fed’s future plans. I suspect the upcoming minutes won’t stir up the markets since many wait for the September or end of the year FOMC meeting, in which the Fed may decide to taper QE3. Until then, the ongoing developments in the U.S economy could influence traders as to the future plans of the Fed. The upcoming U.S reports for this week include: federal budget, PPI, consumer sentiment, and jobless claims. If these reports will keep showing progress in the U.S economy, they could adversely affect precious metals prices. China’s new loans and CPI reports could positively affect commodities prices if they will show higher than expected growth. China is among the leading countries in importing gold and silver. The upcoming rate decisions of BOJ could affect the Japanese yen if the bank will update its economic projections or its monetary policy. The current expectations are that these banks will keep their rates unchanged.


Gold holdings of the SPDR gold trust ETF fell again last week: the ETF’s amount of gold held slipped by 0.78% during July and by 28.8% since the beginning of the year. Current gold holdings are at 961.9 tons. If the ETF’s gold holdings continue to fall, this could indicate the demand for gold as an investment further diminishes. Finally, the Indian Rupee changed direction and depreciated against the USD during last week; if the Rupee’s downward trend will persist; it may also adversely affect the demand of gold in India, among the leaders in importing gold.

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