Gold and silver were traded up on the first day of the month, even though other commodities such as crude oil were traded down. Yesterday the Euro and Australian dollar also appreciated against the U.S. dollar. Currently price of gold and silver are rising. Today, Ben Bernanke will testify in the House of Representatives and the U.S. unemployment claims weekly update will be published (update: jobless claimes declined by 12k last week).
Here is a report of major news and events, and an analysis of metals prices for February 2nd:
Gold and Silver– February Update
Gold price rose again on Wednesday by 0.52% to $1,749.5; silver rose by 1.64% to $33.81. During the week so far, gold added by 0.81% to its value while silver added only 0.05%. These figures show precious metals didn’t do much during the week (UTD).
The chart below presents the development of prices of gold and silver during the last few weeks (metals are normalized to 100= January 13th).
The ratio between gold and silver slightly fell on Wednesday, February 1st and reached 51.75. During this week the ratio rose by 0.76% as gold has slightly outperformed silver.
On Today’s Agenda
U.S. Unemployment Claims: initial claims increased by 21,000 to 356,000 claims for the week ending on January 21st; the number of insured unemployment also rose by 88 thousand to 3,554 thousand on the week of January 14th; the upcoming report could affect the direction of the U.S. dollar and consequently the bullion market;
Bernanke Testifies: following last week’s FOMC decision to prolong its pledge of keeping rates low until late 2014, the speculations around another stimulus plan was reignited. The Chairman of the Federal Reserve, Bernanke will address in his testimony the recent progress of U.S economy and might hint on the future plans for the FOMC; if there will be such a hint, it could influence metals traders.
Forex Market / Gold & Silver Market – February
The Euro/U.S Dollar slightly rose on Wednesday by 0.59% to reach 1.316, but during the week it slipped by 0.45%; the upcoming testimony of Bernanke and the U.S. unemployment report might affect the direction of the U.S. dollar; thus, if the Euro will continue to trade up against the U.S Dollar it could indicate that precious metals prices will also trade up. Currently, the Euro/USD is slightly rising.
Current Gold and Silver February 2nd
Gold price per ounce (March 2012 delivery) is traded at $1,761.4 per t oz. a $11.9 or 0.68% increase as of 15:53*.
Silver price per ounce (March 2012 delivery) is at $34.21 per t oz – a $0.403 or 1.19% increase as of 15:56*.
(* GMT)
Gold and Silver Forecast
Gold and silver prices started off February on a positive note as precious metals were trade up. But during the week so far they haven’t done much and only moderately rose. Some have attributed the recent rally in gold and silver prices to the improvement in the global manufacturing, but I still suspect the recent charge on gold and silver was mostly driven by the FOMC’s decision from last week. The upcoming testimony of Bernanke might shed some light on this decision and perhaps he might also reveal the future plans of the Fed including whether he considers another stimulus plan. I speculate, if there will be a hint of such sorts it could affect the direction of gold and silver prices and trade them up.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
13:30 – U.S. Unemployment Claims
15:00 – Bernanke Testifies
15:30 – EIA Natural Gas Market Report
Tomorrow
12:00 – Canada Employment Report
13:30 – U.S. Non-farm Payroll Report
15:00 – U.S. ISM Non-Manufacturing PMI
15:00 – U.S Factory Orders
For further reading: