Gold and silver remained virtually unchanged as both precious metals edged down during yesterday. In Europe, ECB and BOE left their respective monetary policy unchanged: ECB decided to leave its rate unchanged at 0.75%, but ECB President hinted of a possible rate cut in the near future. BOE left its asset purchase program and cash rate unchanged. The big news in the forex market came from Japan when BOJ Governor Kuroda stated he will augment the Bank’s asset purchase program until Japan will reach an annual inflation of 2%. This news pushed the yen down during yesterday. In the U.S, jobless claims increased by 28k to reach 385k – a four month high. Will gold and silver bounce back today? Currently, the prices of gold and silver are rising. On today’s agenda: U.S. Non-Farm Payroll Report (update: only 88k jobs were added in March), Canada’s Employment Report, American Trade Balance, Canadian Trade Balance and Swiss National Bank Foreign Currency Reserve.
Here is a short outlook for precious metals for Friday, April 5th:
Precious Metals – April Update
On Thursday, the price of gold slipped by 0.07% to $1,552; Silver also edged down by 0.11% to $26.77. During April, gold decreased by 2.68%; silver, by 5.39%.
In the chart below are the normalized rates of gold and silver between March and April (normalized to 100 as of February 28th). The prices of silver and gold had a downward trend in the past few days.
U.S. Non-Farm Payroll Report: in February, the labor market rallied again: the number of non-farm payroll employment increased by 236k; the U.S unemployment rate slipped to 7.7%; if in the forthcoming report the employment will rally again by well above 150 thousand (in additional jobs), this may cut again the demand for safe haven investments such as gold and silver. This could pull down the prices of precious metals (see here my last review on the U.S employment report);
The table below shows the relation among the change in number of employees added during the month, and the daily changes in the prices of gold and silver.
Canada‘s Employment Report: In the precious employment report for February, unemployment remained unchanged at 7%; the employment rose by 51k during the month. The upcoming report might affect the Canadian dollar and consequently commodities;
American Trade Balance: This monthly update for February will present the recent developments in imports and exports of goods and services to and from the U.S, including commodities such as oil and natural gas; according to the recent American trade balance report regarding January the goods and services deficit rose during the month to $44.4 billion;
Canadian Trade Balance: In the latest report for January, exports increased by 2.1% and imports also rose by 1.9%; as a result, the trade deficit narrowed from a $332 million deficit in December to $237 million deficit in January;
Currencies / Bullion Market – April Update
Yesterday was a busy day for the forex market. Most notably was the sharp tumble in the yen, following the recent decision of Bank of Japan to double the monetary base by the year 2014. The Euro/ USD changed rallied again on Thursday by 0.65% to 1.2937. During the month, the Euro/USD rose by 0.94%. Conversely, several other currencies such as the Aussie dollar and yen depreciated yesterday against the U.S dollar by 0.25% and 3.48%, respectively. The developments in major currencies against the USD didn’t seem to affect precious metals. The correlations among gold, Euro, Japanese yen and Aussie dollar remained weak during recent weeks: the linear correlation between gold and USD/Yen reached -0.10 (daily percent changes); the linear correlation between the gold and Euro/USD was -0.16 (daily percent changes). These weak correlations suggest the recent shifts in precious metals rates had little to do with the daily changes in the foreign exchange markets.
Current Gold and Silver Rates as of April 5th
Gold (short term delivery) is traded at $1,552.7 per t oz. a $0.9 or 0.06% increase as of 01:39*.
Silver (short term delivery) is at $26.85 per t oz – a 0.31% increase as of 01:39*.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
08:00 – Swiss National Bank Foreign Currency Reserve
13:30 – Canada’s Employment Report
13:30 –American Trade Balance
13:30 – Canadian Trade Balance
13:30 – U.S. Non-Farm Payroll Report
For further reading: