Gold and silver prices didn’t do much yesterday after their recent rally in the previous two business days. Currently gold and silver are trading sharply down along with the other commodities prices (crude oil price is currently down by 2.18%) – Some suggest this tumble is driven by the recent U.S durable goods report (update: the U.S core durable goods rose by $4.5 billion). I think this positive sign is another indicator for traders that the U.S economy is still growing and thus lowers the chances of another Fed stimulus plan. Today there are several items on the agenda including: Euro Area Monetary Development, U.S Core Durable Goods, Great Britain Current Account and Great Britain Updated GDP 4Q 2011.
Here is a short forecast on gold and silver prices for Wednesday, March 28th:
Gold and Silver– March Update
Gold price edged down on Tuesday by 0.03% to $1,687; silver also traded down by 0.41% to $32.62. During March, gold declined by 1.38% and silver by 5.85%.
The chart below shows the developments of gold and silver prices during the past couple of weeks (prices are normalized to March 13th). The chart shows the fall and rise of precious metals prices.
Euro Area M1, M3 Monthly Update: In the previous report, the annual growth rate for M3 sharply rose to 2.5%; M1 increased to 2.0%; loans to private sector rose to 1.1%. If the M1 and M3 will continue to rise in March report it could serve as another indicator for the rising inflation pressures in the Euro Area, and it may affect next month’s ECB’s interest rate decision;
U.S Core Durable Goods: This monthly report will examine the changes in U.S. orders of durable goods in the manufacturing sector during February 2012. This report may indirectly present the changes in U.S. demand for commodities including crude oil. According to a estimate for January 2012, manufactured durable goods sharply decreased to $206.1 billion; Non-defense new orders for capital goods also fell to $79.5 billion; if this report will continue to be negative then it could weaken the US dollar and thus positively affect gold oil and silver prices;
Great Britain Current Account: This will report will show recent changes in the balance of payment of Great Britain that reached in the recent report to 15.2 billion pound; this report may affect the GBP/USD;
Great Britain Updated GDP 4Q 2011: This will be the final projection of the fourth quarter real GDP of GB. In the previous estimate of the GDP for the 4Q2011 contracted by 0.2%;
Forex / Gold & Silver Market – March
The Euro/U.S Dollar slipped on Tuesday by 0.32% to 1.3316. During March Euro/U.S Dollar edged down by 0.1%; furthermore, the Australian dollar Canadian dollar also depreciated against the U.S. dollar by 0.69%, and 0.42%, respectively. The Aussie dollar, CAD and Euro were historically linearly correlated with the daily percent changes of gold and silver prices. If the Euro/USD and AUD/USD currencies pair will continue their fall today then they may also adversely affect gold and silver prices. Currently, the Euro/USD is slightly increasing.
Current Gold and Silver Prices March 28th
Gold (April 2012 delivery) is traded at $1,659.2 per t oz. a $28.5 or 1.69% decrease as of 18:24*.
Silver (April 2012 delivery) is at $31.855 per t oz – a $0.141 or 2.33% decrease as of 18:25*.
Daily Outlook and Analysis
Gold and silver prices didn’t do much yesterday following the sharp gains in the past couple of business days. But there weren’t many news items on yesterday’s agenda so that there weren’t big moves for bullion prices. Today, the U.S core durable goods monthly report may affect the U.S dollar and consequently precious metals prices. If this report will continue to show a decline in durable goods purchases, it may signal a slowdown in U.S economy. Furthermore, the EU M1, M3 report may affect the path of the Euro/USD and consequently gold and silver prices. I speculate there won’t be sharp changes today for bullion prices and they may start to moderately climb back again.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
09:00 – Euro Area Monetary Development
09:30 – Great Britain Current Account
09:30 – Great Britain Updated GDP 4Q 2011
13:30 – U.S Core Durable Goods
15:30 – EIA Crude Oil Stockpiles Report
13:30 – Final U.S GDP 4Q 2011 Estimate
13:30 – U.S. Department of Labor– Jobless Claims Weekly Update
15:30 – EIA U.S. Natural Gas Market Report
17:45 – Bernanke Speech
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