The prices of gold and silver remained virtually unchanged again. The recent decision of ECB to keep its rate unchanged may have contributed to the sharp gain in the Euro against leading currencies including the USD. Other leading risk currencies also rose against the USD. Their rally, however, didn’t help to pull up precious metals rates. In the U.S, jobless claims slipped by 7k to 374k; according to the recent trade balance report, the deficit of goods and services rose to $44.4 billion in January mainly due to the decline in exports and rise in imports. This news may have also pulled down the USD. Will gold and silver rally today? Currently, gold and silver are falling. On today’s agenda: Swiss Inflation, Canada’s Employment Report, China’s CPI, U.S. Non-Farm Payroll (update: employment rose by 236k in February).
Here is a short outlook for precious metals for Friday, March 8th:
Precious Metals – March Update
On Thursday, the price of gold inched up by 0.01% to $1,575.1; Silver edged up by 0.02% to $28.78. During the month, gold slipped by 0.16%; silver rose by 1.37%.
In the chart below are the normalized prices of gold and silver during February-March (normalized to 100 as of February 18th). The prices of gold and silver didn’t have a clear trend in recent days.
The ratio between the two precious metals slipped again on Thursday to 54.72. During March, the ratio declined by 1.51% as gold slightly under-performed silver.
Currencies / Bullion Market – March Update
The Euro/ USD spiked on Thursday by 1.08% to 1.3107. During the month, the Euro/USD rose by 0.3%. The Aussie dollar also increased by 0.34% against the USD. The correlations among gold, Euro and Aussie dollar remained very weak in recent weeks: during February/March, the linear correlation between gold and AUD/USD declined to 0.07 (daily percent changes); This weak correlation might imply the recent developments in gold and silver rates had less to do with the daily changes in the foreign exchange markets.
Current Gold and Silver Rates as of March 8th
Gold (short term delivery) is traded at $1,578.7 per t oz. a $3.5 or 0.22% increase as of 08:48*.
Silver (short term delivery) is at $28.83 per t oz – a $0.02 or 0.06% increase as of 08:48*.
(* GMT)
On Today’s Agenda
U.S. Non-Farm Payroll Report: in the previous report for January, the labor market expanded again: the number of non-farm payroll employment rose by 157k; the U.S unemployment rate remained 7.9%; if in the upcoming report the employment will increase again by well above 120 thousand (in additional jobs), this may lower the chances of the Fed augmenting its monetary policy (see here my last review on the U.S employment report). The table below shows the recent changes in employment and the daily changes in gold and silver. The table also shows the linear correlation among these factors.
Swiss Inflation: this report will show to the monthly changes in the Swiss consumer price index as of February 2013; in the recent report regarding January the CPI slipped by 0.3%;
Canada’s Employment Report: In the previous employment update for January 2013, unemployment edged down to 7%; the employment fell by 22k during the month;
China’s CPI: during January, the Chinese inflation rate rose to an annual rate of 2%; this rate is well below China’s inflation target of 4% in annual terms. If the inflation will continue decline, it could indicate that China’s economic progress isn’t expanding; China is among the leading countries in importing commodities such as gold;
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
Today
08:15 – Swiss Inflation
13:30 – Canada’s Employment Report
13:30 – China’s CPI
13:30 – U.S. Non-Farm Payroll Report
For further reading: