Gold and Silver Forecast for January 10th

The prices of gold and silver didn’t do much in the past several days and only slowly declined. The recent publication of the minutes of the December FOMC meeting rekindled the conversation about the upcoming future tapering of the Fed. In the mean time, the upcoming release of the U.S non-farm payroll report could stir up the markets and pull back down the prices of gold and silver, if the number of added jobs exceeds the current expectations. According to ADP, there was a sharp rise of 238k jobs in December. On today’s agenda: U.S. Non-Farm Payroll, China New Loans, Switzerland’s CPI, Great Britain Manufacturing Production, and Canada’s Employment Report.

Here is a short overview for precious metals for Friday, January 10th:

Gold and Silver – January Review                             

On Thursday, gold rose by 0.32% to $1,229.4; Silver, by 0.74% to $19.67. During January, gold rose by 2.25%; silver, by 1.72%. In the chart below are the normalized prices of bullion for the past several weeks (normalized to 100 as of December 18th). The prices of gold and silver have moved in an unclear trend.

Gold and silver Chart 2014  January 10

The ratio between the two precious metals rose on Thursday to 62.49. During January, the ratio slightly increased by 0.51% as silver has moderately under-performed gold.

Gold  to silver ratio Chart 2014  January 10The gold and silver futures volumes of trade have slipped and reached on Thursday 166 thousand and 39 thousand, respectively. The volume of trade is likely to rise today especially if the NF payroll report surprises.

volume Gold & silver prices 2014  January 10

On Today’s Agenda

U.S. Non-Farm Payroll Report: In the last employment report regarding November 2013, the labor market improved: The number of non-farm payroll employment increased by 203k – close to the number many had expected; the U.S unemployment rate fell to 7%; the upcoming employment report could show additional rise in jobs. If the employment exceed 150 thousand (in additional jobs), this may drag further down gold and silver;

The chart below shows the changes in the U.S employment in recent years, the reaction of gold and silver prices to the news and the correlations among them.

U.S.Labor Reports gold price and silver prices January 10 2014

Switzerland’s CPI: In the last update, the consumer price index remained flat; if the CPI moves, this may influence the Swiss National Bank’s monetary policy;

Great Britain Manufacturing Production: This report will show the annual rate of GB’s manufacturing production as of November; in the last report regarding October 2013 the index rose by 0.4% (M-2-M); this news may affect the British Pound;

Canada‘s Employment Report: In the previous employment update for November 2013, unemployment remained flat at 6.9%; the employment grew by 21.6k during last month. The next report might affect the Canadian dollar;

China New Loans: This report will pertain to the recent changes in China’s new loans. According to the recent update, the total loans rose; this report is another indicator for China’s economic development;

Currencies / Precious Metals Correlations – January Update

On Thursday, the Eur/USD currency pair rose by 0.24% to 1.3608. During January, the Eur/USD decreased by 0.98%. Conversely, other currencies such as the Canadian dollar slightly depreciated yesterday against the U.S dollar by 0.19%. The correlations among gold, silver and Euro have further weakened again in recent weeks, e.g. the correlation between the USD/CAD and gold price is only -0.18 during December/January. This could suggest the shifts of the gold and silver prices have little to do with the changes in the forex market.  


Here is a reminder of the main events and publications that are scheduled for today (all times GMT):


08:15 – Switzerland’s CPI

09:30 – Great Britain Manufacturing Production

13:30 – Canada’s Employment Report

13:30 – U.S. Non-Farm Payroll Report

Tentative – China New Loans

For further reading: