Precious metals prices continue to zigzag with no clear trend as they have rallied yesterday from Wednesday’s falls. The news from Greece of approving the recent austerity plan didn’t impress traders as the Euro only slightly rose on Thursday. Currently however the Euro is falling and dragging along with it gold and silver prices because the EU leaders didn’t approve the rescue package for Greece. ECB left the interest rate unchanged at 1%; ECB President voiced his concern over the economic outlook of EU and the debt crisis. Currently gold and silver prices are falling. These are many news items on today’s agenda including: Great Britain PPI, Canadian Trade Balance report, U.S. Federal Budget Balance, American Trade Balance monthly report, and Bernanke’s Speech.
Here is a report of major news and events, and an analysis of metals prices for Friday, February 10th:
Gold and Silver– February Update
Gold price moderately rose on Thursday by 0.57% to $1,741.2; silver also rose by a similar rate of 0.63% to $33.92. During February, gold nearly didn’t rise while silver rose by 1.97%.
The chart below shows the development of gold and silver during February (metals prices are normalized to 100= January 31st).
The ratio between gold and silver slightly fell on Thursday, February 9th and reached 51.34. During February the ratio fell by 1.89% as silver slightly outperformed gold. In the chart below is the development of this ratio during February.
American Trade Balance: during November the goods deficit rose by $4.6 billion and reached $63.2 billion; the services surplus increased by $0.1 billion; as a result, the goods and services deficit increased during the month to $47.8 billion. If the goods deficit will rise it could indicate a rise in the demand for commodities.
Bernanke Speech: following Bernanke’s testimony earlier the week, he is also set to give a speech in Orlando, Florida regarding housing market;
U.S. Federal Budget Balance: this report indicates the government debt growth and thus may affect the U.S dollar. For December the deficit increased by $85 billion to a deficit of $321 billion for 2012;
Canadian Trade Balance: In November 2011, exports rose by 3.2%, while imports decreased by 0.8%; as a result, the trade balance rose to a surplus of $1.1 billion in November; this report may affect the direction of the Canadian dollar which tends to be strongly correlated with gold and silver prices;
Great Britain PPI Input: this report will present the yearly rate of GB’s producer price index for January 2011; in the last report the input price declined by 0.7% (M-2-M);
Forex Market / Gold & Silver Market – February
The Euro/U.S Dollar only slightly rose yesterday by 0.19% to 1.3285. During February Euro/U.S Dollar rose by 1.54%; furthermore, some other currencies such as Canadian dollar also moderately appreciated against the U.S. dollar. On the other hand the Aussie dollar and Yen depreciated against the USD. During past months there were strong linear correlations among the EURO and Canadian dollar and precious metals prices. If the Euro will change direction and trade down today (mainly if the recent Greek debt news will influence traders) it could indicate that metals will follow and trade down as well. Currently, the Euro/USD is moderately declining.
Current Gold and Silver Prices February 10th
Gold (March 2012 delivery) is traded at $1,733.0 per t oz. a $8.2 or 0.47% decrease as of 07:14*.
Silver (March 2012 delivery) is at $33.885 per t oz – a $0.032 or 0.09% decrease as of 07:14*.
Gold and Silver Prices Outlook and Analysis
Gold and silver prices continue to shift and change direction as they have been doing for the past week. On the last day of the week, it shouldn’t be any different. Today’s publication mainly the US trade balance and Federal budget might affect the direction of the USD and thus may also influence bullion traders.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
09:30 – Great Britain PPI Input
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
15:30 – Bernanke Speech
19:00 –U.S. Federal Budget Balance
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