Gold and silver prices changed direction again and edged down on the last day of the month. The U.S GDP for Q1 2012 was revised down to 1.9%; U.S jobless claims rose last week. On today’s agenda: GB Manufacturing PMI, Canada’s GDP by Industry, U.S. ISM Manufacturing PMI and U.S. non-farm payroll report (update: U.S employment rose by only 69k).Currently gold and silver are sharply rising.
Here is a short outlook for gold and silver for Friday, June 1st:
Precious Metals – May/June Update
Gold price edged down on Thursday by 0.1% to $1,564; silver also decreased by 0.81% to $27.76. During the month gold traded down by 6.01% and silver by 10.51%.
The chart below presents the normalized rates of these metals during the past couple of weeks (normalized to 100 as of May 15th). The chart shows that gold price is still around the $1,550 and silver around $27-$28.
The ratio between the two metals rose on Thursday to 56.35. During the month the ratio increased by 5.03% as silver has moderately under-performed gold during the month.
U.S. GDP was revised down to 1.9% in Q1 2012
According to the recent report, the growth rate of the real U.S GDP during the Q1 of 2012 (second estimate) was 1.9% in annual growth. This is a revised down growth rate from the first estimate of the U.S GDP in which the growth rate was 2.2%. This news may have curbed the fall of bullion rates.
U.S jobless claims rose last week
According to the recent U.S. jobless claims weekly update, the number of initial claims rose for the week ending on May 26th by 20k and settled at 383,000 claims (seasonally adjusted data), which is lower than the revised figure of 373,000 claims from the previous week. This news may have also positively affected ( to a certain degree) precious metals.
On Today’s Agenda
U.S. Non-Farm Payroll Report: this will be the major report of the week and could have some significant effect on bullion rates.
In the previous U.S employment report for April 2012, the number of non-farm payroll increased by 115k;
According the ADP report, the U.S employment increased by only 133k during May 2012; if the upcoming report will be close to this figure, it could suggest the U.S labor market is only slowly improving and could affect not only the U.S dollar (adversely), but also gold and silver rates (positively);
U.S. ISM Manufacturing PMI: This report will refer to the monthly changes in the manufacturing sector on a national level during May 2012. During April 2012 the index rose to 54.8%, which means the manufacturing is growing at a faster rate;
GB Manufacturing PMI: In the previous report regarding April 2012 the index fell to 50.5%. This rate means the manufacturing sector is still expanding but at a slower rate; this index might affect GB Pound;
Canada’s GDP by Industry: In the previous report regarding February 2012, the real gross domestic product edged down by 0.2%. This report may affect the strength of the Canadian dollar which is strongly correlated with bullion prices;
Currencies / Gold & Silver Market – May Update
The Euro/U.S Dollar slipped on Thursday by 0.01% to 1.2366. During the month (UTD) the Euro/U.S Dollar declined by 6.6%. Furthermore, “risk currencies” such as the Canadian dollar also depreciated during Thursday against the USD by 0.25%. If the U.S dollar will change direction and fall against the Euro, it might also positively affect bullion rates. Currently the Euro is declining against the USD.
Current Gold and Silver Prices as of June 1st
Gold (July 2012 delivery) is traded at $1,612.9 per t oz. a $48.7 or 3.11% increase as of 15:12*.
Silver (July 2012 delivery) is at $28.565 per t oz – a $0.808 or 2.91% increase as of 15:14*.
(* GMT)
Daily Outlook for June 1st
Bullion prices didn’t do much yesterday as the U.S reports weren’t positive but didn’t show much movement. The upcoming U.S reports including non-farm payroll report and U.S Manufacturing PMI might affect not only forex but also commodities prices. If the employment will expand by fewer than 130k, I speculate this could help rally bullion rates and to close the week on a positive note.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
Today
09:30 – GB Manufacturing PMI
13:30 – Canada’s GDP by Industry
15:00 – U.S. ISM Manufacturing PMI
13:30 – U.S. Non-Farm Payroll Report
For further reading: