Gold and silver prices continued their recovery and rose again yesterday. The concerns revolving the Greek debt crisis have subsided for now after investors agreed to swap nearly 85% of the Greek debt. Yesterday, ECB announced it will leave its rate unchanged at 1% and also published its financial reports for 2011. According to the report, ECB’s net profit rose to €728 million (in 2010 it was €171 million) after ECB allocated €1,166 million to a risk provision. Finally, U.S. jobless claims rose to 362,000. These events may have been among the factors to pull up the Euro and dragging along with it gold and silver prices during yesterday’s trading. Will this rally continue? Currently gold and silver prices are rising. Today there are several reports to published including: U.S. Non-farm Employment (update: U.S non-farm employment rose by 227k), American Trade Balance, Canada Unemployment Rate and Employment Report and Canadian Trade Balance.
Here is a short review on gold and silver prices for Friday, March 9th:
Gold and Silver– March Update
Gold price increased on Thursday by 0.88% to $1,698.7; silver much like gold increased by 0.73% to $33.83. During the month, gold declined by 0.7% and silver by 2.34%.
The chart below shows the developments of gold and silver during the last few weeks (prices are normalized to February 23rd).
The ratio between gold and silver slightly rose on Thursday, and reached 50.21. During the month the ratio rose by 1.64% as gold has moderately outperformed silver. In the chart below are the developments of this ratio during the last few weeks.
U.S. Non-farm Employment Report for February
in the previous report regarding January 2012, the U.S. labor market continued to improve as the number of non-farm payroll employment expanded by 243k; the U.S unemployment rate declined to 8.5%; this report may affect gold and silver prices.
The table below shows the correlation between the news of the U.S. labor report and the daily changes in gold and silver prices on the day of publication.
According to the ADP report, the U.S. labor rose by 216k during February 2012. If this figure will be close to the actual number to the U.S. labor report it could rally the U.S. dollar, which in turn may trade down gold and silver prices.
Additional Items on Today’s Agenda
American Trade Balance: This report will refer to January 2012; The American trade balance report for December 2011 the goods and services deficit increased during the month to $48.8 billion.
Canada Employment Monthly Update: In the recent employment report, unemployment rose by 0.1 percent points to 7.6%; the employment increased by 18k. the upcoming report might affect the Canadian dollar and consequently also affect the prices of commodities (see here the recent report);
Canadian Trade Balance: In the February report regarding December 2011, exports increased by 4.5%, and imports edged up by 0.8%; as a result, the trade balance rose to a surplus of $2.7 billion; this report may affect the trading of the Canadian dollar which tends to be strongly correlated with gold and silver;
Forex / Gold & Silver Market – March
The Euro/U.S Dollar sharply rose on Thursday by 0.95% to 1.3274. During the month Euro/U.S Dollar decreased by 0.4%; furthermore, the Australian dollar and Canadian dollar also appreciated against the U.S. dollar by 0.58% and 0.72%, respectively. These currencies pairs are historically related with the daily percent changes of gold and silver prices; thus the direction of the Euro and Aussie dollar during the day may affect gold and silver prices. Currently, the Euro/USD is slightly falling.
Current Gold and Silver Prices March 9th
Gold (April 2012 delivery) is traded at $1,705.5 per t oz. a $6.8 or 0.40% increase as of 05:16*.
Silver (April 2012 delivery) is at $34.04 per t oz – a $0.209 or 0.62% increase as of 05:16*.
Gold and Silver Daily Estimate
Yesterday, gold and silver prices rallied for the second consecutive day as many other financial markets also traded up including crude oil, American stock and “risk currencies” such as Euro and Aussie dollar. Gold traders are very bullish in recent days and thus the recent upward trend of gold price might continue in the days to come. But today this rally might be interrupted.
The upcoming American reports mainly the U.S. labor report may change this recent upward trend: if the U.S. employment expanded again in February it could adversely affect gold and silver prices. Or at the very least curb their recent rally.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
12:00 – Canada Unemployment Rate and Employment Report
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
13:30 – U.S. Non-farm Employment Report
For further reading: