Gold and silver prices continued their slow paced rise during yesterday and thus completed a two day rally. Will this rally continue throughout the rest of the week is not clear yet. Today the minutes of the FOMC meeting will be released. This might offer some insights as to previous decision and hint on the future steps of the FOMC in the upcoming meeting at the end of the month. The U.S continued to show signs of progress as the U.S PMI manufacturing index increased from 52.7% in February to 53.4% in March. This means the U.S economy is not only expanding but also at a faster pace. This news may have been among the factors driving up not only commodities prices, but also American stock indexes during the day. Currently gold and silver are edging down. There are several other reports to be published today worth noticing: the RBA cash statement, U.S factory orders, and Australian trade balance.
Here is a short forecast on gold and silver prices for Tuesday, April 3rd:
Gold and Silver– April Update
Gold price rose again by 0.47% to $1,679; silver also increased by 1.89% to $33.1.
The chart below presents the changes in gold and silver prices during the past few weeks (prices are normalized to March 13th). The chart shows how both precious metals prices zigzagged during said time.
The ratio between gold and silver slipped to 50.75. During the past few weeks the ratio edged up by 0.59% as silver has moderately underperformed gold. In the chart below are the changes in this ratio between March 13th and April 2nd.
Commodities Related News for April 3rd
Goldman Sachs cut its recommendations on raw commodities;
The S&P500 has outperformed gold price during 2012 so far;
The EU rate on unemployment edged up from 10.7% in January to 10.8% in February. This news may have pulled down a bit the Euro which is strongly correlated with the changes in bullion prices.
On Today’s Agenda
FOMC Meeting Minutes: Following the last FOMC meeting, in which it was decided not to introduce nay additional monetary expansion measures, the market promptly reacted to this news as gold and silver prices sharply fell. The minutes of the FOMC meeting might offer some insight behind this decision regarding the future steps of the FOMC;
U.S Factory Orders: This report will present the changes inU.S. factory orders of manufactured durable goods during February; this report will offer some insight to the progress of the U.S economy and could affect the direction of the U.S dollar;
Cash Rate Bank of Australia: the overnight money market interest rate ofAustralia’s Reserve Bank remained unchanged at 4.25% since December 2011; the upcoming RBA’s rate decision may affect the AUD/USD that is strongly related with gold and silver prices;
Australian Trade Balance: The upcoming report will pertain February 2012. In the previous report, the seasonally adjusted balance of goods and services declined from a surplus of $1,325 million in December 2011 to a $673 million deficit in January 2012. The export of non-monetary gold sharply declined by $1,070 million (56%); if the gold exports will continue to contract in February, it might suggest a decline in demand for non-monetary gold that could explain the decrease in gold prices (see here last report);
G7 Meeting: the financial ministers of the seven top counties will convene during the day; if they will produce a big headline it could stir up the financial markets;
Forex / Gold & Silver Market – April
The Euro/USD slightly declined on Monday by 0.18% to reach 1.332; alternatively, several other currecines pairs such as AUD/USD were traded up. If the Euro/USD and AUD/USD pairs will continue to edge up today then their rally may also positively affect gold and silver prices.
Current Gold and Silver Prices April 3rd
Gold (May 2012 delivery) is traded at $1,679.4 per t oz. a $0.3 or 0.02% decrease as of 03:32*.
Silver (May 2012 delivery) is at $33.02 per t oz – a $0.078 or 0.24% decrease as of 03:28*.
Daily Outlook and Analysis
Gold and silver prices kicked off the month on a positive note; their overall performance hadn’t been staggering to say the least during 2012 (up to date). Another QE program could, however turn the tables around and push gold and silver prices up again. But I still think there won’t be another QE program. Today’s U.S factory orders report and FOMC meeting minutes might affect the markets especially there will be unexpected turn of events. Finally if the RBA will come up with big headlines it could affect the Aussie dollar which is strongly linked with the changes in gold and silver prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
4:30 – Reserve Bank ofAustralia– Cash Rate Statement
15:00 – U.S Factory Orders
All day – G7 Meeting
19:00 – FOMC Meeting Minutes
2:30 – Australian Trade Balance
12:00 – German Factory orders
12:45 – ECB Rate Decision
U.S.ISM Non-Manufacturing PMI
15:30 – EIA Crude Oil Stockpiles Report
For further reading: