Gold and silver prices sharply rose yesterday and thus rallied from their decline on Wednesday. Bank of Japan announced it will expand stimulus and will purchase government bonds by 10 trillion yen (roughly $124 billion). This means the asset purchase fund will rise to 40 trillion yen. S&P cuts Spain’s credit rating from A to BBB+ – a decrease of two notches. S&P also assigned a “negative outlook” for Spain. Finally the rating agency had harsh words against Euro Area’s handling its debt crisis. These events may slightly affect forex and commodities markets today.
Currently gold and silver prices are rising. On today’s agenda: U.S GDP for Q1 2012, KOF Economic Barometer, and Bank of Japan Press Conference. Yesterday’s Updates: The U.S jobless claims slightly declined; U.S pending home sales rose in March. Here is a short analysis and estimate for gold and silver prices for Friday, April 27th:
Gold and Silver– April Update
Gold price rose on Thursday by 1.11% to $1,660.5; silver even more than gold prices increased by 2.8% to $31.28. During April, gold decreased by 0.68% and silver by 3.72%.
The chart below shows the changes of both bullion prices during recent weeks (gold and silver are normalized to 100 as of March 30th).
The ratio between gold and silver declined to 53.09. During April the ratio increased by 3.15% as gold has outperformed silver during the month. In the chart below are the developments of this ratio during recent days.
First U.S GDP 1Q 2012 Estimate: (update: U.S GDP grew by 2.2% in Q1 2012)This will be the first estimate of U.S’s first quarter 2012 real GDP growth. In the 4Q2011 the GDP growth rate reached 3%, compared with 1.8% increase at 3Q2011. The current expectations are that the growth rate in the first quarter will be similar to the fourth quarter of 2012. This news may affect forex and commodities prices including gold and silver prices (for the final estimate of 4Q GDP).
KOF Economic Barometer: this report offers an outlook of the Swiss economy in the months to come. In the previous press release, the report predicted that the Swiss Economy is headed towards an expansion in 2012;
Bank of Japan Press Conference: Following the Bank’s decision to expand it monetary expansion of roughly $124 billion, a press conference will be held today; this conference may shed some light on this decision and thus may affect not only the Yen but also commodities prices;
Forex / Gold & Silver Market – April
The Euro/U.S Dollar nearly didn’t change on Thursday as it edged up by 0.01% to 1.3218. During April Euro/U.S Dollar decreased by 0.9%; on the other hand, the “risk currencies” mainly the Aussie dollar slightly appreciated yesterday against the U.S. dollar by 0.37%. If the U.S dollar will continue to depreciate against the abovementioned currencies, this may signal gold and silver will trade up.
Current Gold and Silver Prices as of April 27th
Gold (May 2012 delivery) is traded at $1,665.7 per t oz. a $5.2 increase as of 16:29*.
Silver (May 2012 delivery) is at $31.36 per t oz – a $0.084 increase as of 16:29*.
Daily Outlook and Analysis for April 27th
Gold and silver prices bounced back yesterday from their decline on Wednesday. The recent developments in Euro zone including the S&P’s announcement to downgrade Spain and its criticism towards the Euro Area’s handling of the debt crisis might adversely affect the path of the Euro and thus may also adversely affect a bit commodities prices. More importantly, if the U.S GDP growth rate will not hit expectations and reach less than the 2.4%-2.6% growth rate, this may slightly weaken the U.S dollar and consequently bullion prices may trade up a bit.
Here is a reminder of the top events and reports that are planned for today (all times GMT):
10:30 – KOF Economic Barometer
13:30 – First U.S GDP 1Q 2012 Estimate
Tentative – Bank of Japan Press Conference
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