Gold and Silver Prices Outlook for April 15-19

Gold and silver plummeted again during last week. Their decline didn’t seem to coincide with the developments in the forex markets but did coincide with the sharp fall of other commodities and equity markets.  The rise in volatility of gold and silver prices in recent weeks may have been the main reason for the CME to raise on April 15th its margins on gold and silver by 19% and 18.5%, respectively. This decision may have been the key factor in pulling down the prices of gold and silver on April 15th. This tactic of raising margins was done in past including in 2011 when gold and silver sharply increased. The decision back then pulled down the prices of gold and silver as was the case on April 15th. The minutes of the recent FOMC meeting may have rekindled the speculations that the FOMC will end QE3 sooner than anticipated. This news may have been the trigger for the sharp fall in the prices of gold and silver. By the end of the week, the retail sales report came out and showed that retail performed worse than many have expected. This news may have adversely affected not only commodities but also equity markets. Will gold and silver continue to fall next week? Here is a short outlook for April 15th to April 19th; this includes a fundamental analysis of the main reports, events and speeches that may affect precious metals. These include: U.S CPI, Philly fed survey, China’s GDP for Q1 2013, U.S housing starts, Germany’s ZEW economic sentiment, Japan’s trade balance, minutes of MPC monetary policy, minutes of RBA meeting, and U.S. jobless claims.  

Gold plummeted during last week by 4.73%; moreover, during the week, the average rate reached $1,556.5 /t. oz which was 0.94% below last week’s average. Gold ended the week at $1,501 /t. oz.

Silver also plunged by 3.27%; conversely, the average rate decreased by 0.53% to reach $27.34/t oz compared to last week’s average.

Herein is a short overview that presents the main reports, speeches and events that may affect gold and silver next week between April 15th and April 19th.

Based on the forthcoming publications and the ongoing bearish market sentiment in the gold and silver markets, the prices of precious metals might continue to fall in the coming days.  If the upcoming U.S reports including: housing starts, jobless claims, and Philly fed index will show signs of growth, they could drag down the prices of gold and silver. Next week the IMF and G20 Summits might shed some light on the future developments in Europe vis-à-vis Cyprus’s bailout. Last week’s publication of the minutes of the FOMC meeting in March might keep the prices of gold and silver from bounding back.  The SPDR gold trust ETF holdings continue to dwindle: the ETF gold hoards fell by 5% during this month. If the hoards will continue to dwindle, they could indicate the demand for gold is diminishing.

The long term securities yields slightly rose last week but are still down for the month. This suggests the market sentiment is becoming more risk averse. Albeit the shift in the general market sentiment isn’t pulling up gold and silver prices as it did in recent years. Perhaps the stand of gold as a safe haven is undermined. Finally, in India, if the Rupee will continue to depreciate against the USD, as it did during the month; it may adversely affect the demand for gold in India.

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