Precious metals prices changed direction again for the third consecutive day. Yesterday gold and silver prices ended the day falling. Currently gold and silver prices are moderately rising. These are many news items and decisions on today’s agenda including: ECB interest rates decision, BOE rate decision, Great Britain Manufacturing Production monthly report, U.S. Unemployment Claims weekly update, and China’s Trade Balance report.
Here is a report of major news and events, and an analysis of metals prices for Thursday, February 9th:
Gold and Silver– February Update
Gold price fell on Wednesday by 1.36% to $1,748.4; silver also rose by a similar rate of 1.32% to $34.19. During February, gold slightly rose by 0.46% and silver by 2.8%.
The chart below shows the development of gold and silver during the past few weeks (metals prices are normalized to 100= January 24th).
The ratio between gold and silver slightly rose on Wednesday, February 8th and reached 51.37. During February the ratio fell by 1.83% as silver slightly outperformed gold. In the chart below is the development of this ratio during January and February (UTD).
On Today’s Agenda
ECB Press Conference and Euro Rate Decision: Last month P Mario Draghi kept the interest rate unchanged at 1%;the Euro Area inflation rate fell to an annual rate of 2.8%, which is still well above the ECB target inflation of 2%. But at least the recent rate reductions didn’t seem to cause inflationary pressures. Since the EU economic condition is still unclear vis-à-vis its debt crisis and the Greek debt negotiations are still in progress, in the upcoming ECB rate decision there might be talks of another rate cut. But there are those who think there won’t be another rate cut for now. If ECB will cut again interest rates it might pressure down the Euro and consequently affect gold and silver prices;
U.S. Unemployment Claims: initial claims fell by 12,000 to 367,000 claims for the week ending on January 28th; the number of insured unemployment also decreased by 43k to 3.52 million during the week of January 21st;
Great Britain Manufacturing Production : in the previous report the seasonally adjusted manufacturing index fell by 0.2% (M-2-M), and the index of production also fell by 0.6%; this news may influence GBP traders;
Great Britain Bank Rate & Asset Purchase Plan: Bank of England will decide on its basic rate for February 2012 and the progress of its asset purchase plan; as of January the BOE’s rate flat at 0.5% and the asset purchase plan of £275 billion continued;
China’s Trade Balance: China’s trade surplus reached a surplus of $16.5 billion last month; this report could indicate the status of China’s economic growth and thus may affect Asian financial markets;
Forex Market / Gold & Silver Market – February
The Euro/U.S Dollar remained unchanged at the end of yesterday’s trading at 1.3260. During February Euro/U.S Dollar rose by 1.35%; on the other hand, other leading currencies such as Canadian dollar and Australian dollar moderately depreciated against the U.S. dollar. During past months there were strong linear correlations among the EURO and Australian dollar and gold and silver prices. If the Euro and Australian dollar will trade down today (mainly if there will be another rate cut by the ECB) it could indicate that metals prices will follow and decline as well. Currently, the Euro/USD is moderately falling.
Current Gold and Silver February 9th
Gold price per ounce (March 2012 delivery) is traded at $1,733.6 per t oz. a $2.3 or 0.13% increase as of 23:34*.
Silver price per ounce (March 2012 delivery) is at $33.910 per t oz – a $0.206 or 0.61% increase as of 23:34*.
Gold and Silver Prices Forecast
Gold and silver prices continue to zigzag with no clear path during this week after they had a sharp upward trend during most of January. Today’s rate decision might pull down gold and silver prices if there will be another rate cut. The U.S. unemployment claims might affect the strength of US dollar and consequently precious metals prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
09:30 – Great Britain Manufacturing Production
12:00 – Great Britain Bank Rate & Asset Purchase Plan
13:30 – ECB Press Conference and Euro Rate Decision
13:30 – Department of Labor Report – U.S. Unemployment Claims
15:30 – EIA U.S. Natural Gas Market Report
tentative –China’s Trade Balance
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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