Gold and Silver Prices Weekly Outlook for May 7- 11

Last week gold and silver prices slightly decreased despite their modest come back on Friday following another disappointing U.S employment report. This upcoming week there are many news items on the agenda that may affect gold and silver prices. The main events of the week will revolve the U.S trade balance, the results in the French and Greek elections on Sunday, the Germany factory orders, ECB President Speech, Canada and Australia employment reports, U.S PPI, and Bernanke’s speech.

Here is a short overview and a forecast for the upcoming week of May 7th to May 11th; this includes a short description with a fundamental analysis of the main events publication, and public speeches that may affect bullion prices during the upcoming week.

Gold slightly declined during last week by 1.14%; Silver, much like gold , decreased on a weekly scale by 1.88%.

During last week it was reported that the U.S manufacturing PMI increased to 54.8%; U.S initial jobless claims sharply decreased to 365k. These news items may have been responsible to pull down precious metals during most of the week.  On the other hand, by the Friday the U.S non-farm payroll report came out and showed a modest gain of only 115k in April. This news may have been among the factors to rally bullion.

During last week the Euro sharply declined against the U.S dollar by 1.29% (on a weekly scale); furthermore, other “risk” currencies such as the Australian dollar and Canadian dollar also depreciated against the U.S dollar during last week by 2.78% and 1.59%, respectively. The decision of the RBA to lower the cash rate by 50 pp was probably among the key factors to lower the value of Aussie dollar. This decline of the Euro/USD and AUD/USD may have been among the factors to pull precious metals down during most of last week.

The video link above shows a broad projection for the main news, public speeches and events that may affect the precious metals during the week of May 7th to May 11th; the video includes reviewing the main reports, events, decisions and publications that will come out during the upcoming week. Some of these reports and events include: U.S trade balance report, Australian employment, speech of Fed Chairman Bernanke, China’s trade balance, Germany factory orders, OPEC monthly report and  U.S. jobless claims weekly update (just to name a few).

In conclusion, unless there will some breaking news I speculate bullion will continue their moderate downward trend: if the U.S reports including the trade balance, jobless claims and PPI will beat or meet expectations then this might contribute to pulling down gold and silver. The results in the elections over the weekend in France could also have a short term adverse effect on the Euro, which is strongly and positively linked with bullion prices. The EU related publications may also play a role in the direction of the Euro and consequently also precious metals . Finally, if Bernanke will talk in his upcoming speech about the Fed’s plans in the near future it might also have a significant effect on precious metals .

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