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Samirofi
01-13-2014, 03:57 PM
Gold and Silver Outlook for January 13-17 <br />
Gold and silver bounced back mainly by the end of the week following the lower than expected rise in new jobs. According to the latest NF payroll report, ...

Samirofi
01-20-2014, 03:02 PM
Gold and Silver Forecast for January 20-24
Gold and silver continued to slowly recover during last week following their tumble in December. The current low volatility in the bullion market might continue until the next FOMC meeting at the end of January will take place. This meeting might stir up the precious metals market again. In the meantime, several reports came out last week and showed the U.S economy is slowly recovering: Philly (http://www.marketwatch.com/story/philly-fed-manufacturing-index-improves-in-january-2014-01-16?link=MW_latest_news) Fed index rose to 9.4 in January; jobless claims (http://www.dol.gov/opa/media/press/eta/ui/current.htm) declined by 2k to 326k; retail sales grew by 0.2% during December; both CPI (http://www.bls.gov/news.release/cpi.nr0.htm) and PPI increased in December by 0.3% and 0.4%, respectively. Despite the sharp rise in CPI, the core CPI inched up by only 0.1%; the annual rate remained at 1.7%. For the week of January 20th to 24th, several reports and speeches will take place this week including: China’s GDP report, German Ifo business climate, U.S existing home sales, U.S manufacturing PMI, BOC monetary policy report and rate decision, China, Germany and France’s manufacturing PMI reports, and U.S. jobless claims.


The price of gold edged up by 0.4% last week; moreover, during last week, the average price reached $1,245.38/t. oz which was 0.93% higher than last week’s average rate. Gold ended the week at $1,251.9 /t. oz.


Silver also inched up by 0.33%; further, the average weekly rate was $19.86/t oz, which was 1.77% above last week’s price.


Let’s breakdown the main events by leading economies:


U.S


Following the release of the minutes of the last FOMC meeting a couple of weeks ago, the next FOMC even will take place at the end of the month. Until then, bullion traders will continue to read the tea leaves and see if the U.S reports show of any potential changes in the progress of the U.S economy. The upcoming reports will be related to manufacturing and housing sectors including: manufacturing PMI and existing home sales. The regular weekly update on the jobless claims will also be released. If these reports continue to show progress in the U.S economy, they could pressure down the prices of gold and silver. Moreover, if the U.S dollar continues to rally against leading currencies such as Euro and Aussie dollar, this could also moderately pull down the prices of gold and silver. The Euro/USD and precious metals had a very weak correlation in recent weeks (during December/January the linear correlation was only -0.12 – mid weak correlation). These correlations show that the U.S dollar had little to do with the progress of precious metals. As such, this could suggest the progress of the U.S dollar will have little effect on precious metals prices’ development.


India and China


During the previous week, the Indian Rupee slightly depreciated against the USD. If this trend continues, it could adversely affect the demand for gold and silver in India.


China is still leading the way in its demand for gold and silver. The progress of this economy could indirectly indicate the potential development in the demand for gold and silver. The upcoming financial releases on China’s economy including GDP for the fourth quarter and manufacturing PMI could offer some additional info regarding the progress of this country.


Finally, gold holdings of SPDR gold trust ETF changed course and rose in the past week – for the first time since early November 2013. The ETF was still down by nearly 5.5% in the past couple of months and 0.5% since the beginning of 2014. Gold holdings were at 797.054 tons by the end of last week. If the ETF’s gold holdings continue to pick up, this may signal the demand for gold as an investment is slowly recovering.

In conclusion, this week gold and silver might continue to slowly rise. Precious metals seem to slowly recover from their tumble in December. The few U.S reports could modestly affect the prices of gold and silver; if they show the U.S economy continues to improve, precious metals might slightly decline. The slow rise in volume of trade could cut down the level of volatility of prices. Finally, if the demand for gold and silver as investments continue to pick up, they could slightly strengthen bullion prices. Therefore, I remain neutral on gold and silver.

Samirofi
01-27-2014, 03:13 PM
Gold and Silver Forecast for January 27-31
Gold price continued to slowly recover during last week, while silver changed course and fell. The weakness in the equities markets and the depreciation of the US dollar against the Euro and Japanese yen may have contributed to the rally of the yellow metal. During last week several reports were released: U.S jobless clams inched up by 1k to reach 326k; American existing home sales slightly disappointed and rose by only 1% during December to reach 4.87 million home sales. These reports, however, didn’t seem to affect much the financial markets. For the week of January 27th to 31st, several reports and events will take place this week including: FOMC meeting, Euro group summit, U.S new and pending home sales, U.S GDP for the fourth quarter, China’s manufacturing PMI, EU monetary development, U.S consumer confidence, and U.S. jobless claims.


The price of gold (http://www.tradingnrg.com/gold-and-silver-prices-weekly-review-january-20-24-2014/) increased by 1% last week; further, the average price reached $1,251.82/t. oz which was 0.52% higher than last week’s average rate. Gold ended the week at $1,264.5 /t. oz.


Conversely, silver price decreased by 2.64%; further, the average weekly rate was $19.94/t oz, which was 1.35% below last week’s rate.


Let’s breakdown the main events by leading economies:


The upcoming FOMC could affect in the short term the prices of gold and silver. Last month, the FOMC’s decision to taper QE3 by $10 billion resulted in a sharp drop in precious metals prices.


The table below shows the reaction of gold and silver to the FOMC’s decisions in the past several years.

http://pcm-fx.com/pcmupload/uploads/1390821155491.jpg (http://pcm-fx.com/pcmupload/)


The upcoming decision won’t accompany an economic outlook update and press conference, which could result in a smaller effect on the financial markets. If the FOMC decides to taper by additional $10 billion it could have some modest adverse effect on gold and silver for the short term. If the FOMC tapers by a larger margin, it could have a stronger negative effect on precious metals, but again for a short term. If the FOMC doesn’t change its policy, this could result in a moderate positive effect on bullion prices.


Besides the FOMC’s meeting, the recent drop in the U.S equities markets may have also contributed to the rally of alternative investments such as gold.


The upcoming reports will include: GDP for the fourth quarter, core durable goods, jobless claims, new and pending home sales, and consumer confidence. If these reports present progress in the U.S economy, they could drag down the prices of gold and silver. Moreover, the recent appreciation of the US dollar against Aussie dollar and Canadian dollar may have slightly pulled down precious metals. Conversely, if the U.S dollar continues to fall against the Euro and Japanese yen; this could moderately pull up the prices of gold and silver. The Euro/USD and precious metals had a very weak correlation in recent weeks (during December/January the linear correlation was only 0.11 – mid weak correlation; the correlation between USD/YEN and gold is -0.38). These correlations suggest that the U.S dollar had little to do with the development of precious metals. As such, this could suggest the progress of the U.S dollar will have little effect on gold and silver prices.


India and China


During last week, the Indian Rupee sharply depreciated against the US dollar. If this trend continues, it could adversely affect the demand for gold and silver in India.


The demand of gold and silver China, the leading country in importing precious metals, is likely to play a secondary role in affecting the bullion prices. The development in China’s economy could indirectly indicate the potential progress in its demand for precious metals. The upcoming financial releases on China’s economy including manufacturing PMI could offer some insight regarding the progress of this country.


Finally, gold holdings of SPDR gold trust ETF changed course and fell in the past week. The ETF was down by nearly 6.3% in the past couple of months and 1.34% since the beginning of 2014. Gold holdings were at 790.456 tons by the end of last week. If the ETF’s gold holdings continue to fall, this may signal the demand for gold as an investment is further falling.

In conclusion…

The recent rise in precious metals prices may result in some sell-offs. But if the U.S equities markets continue to fall, this could steer investors towards alternative investments such as bullion. The FOMC’s meeting might modestly stir up the bullion markets if the FOMC were to change its monetary policy; currently, analysts (http://www.forexcrunch.com/fed-likely-to-taper-little-and-often-as-underlying-economic-momentum-remains-strong/) expect that the FOMC will taper again QE3 by additional $10 billion. The upcoming U.S reports such as core durable goods, GDP for fourth quarter, and home sales could affect the prices of gold and silver; if they show the U.S economy continues to improve, gold and silver might slightly decline. The rise in volume of trade could reduce the level of volatility of prices. Finally, if the demand for gold and silver as investments continue to decline they could slightly weaken bullion prices. Therefore, I think gold and silver could continue to rally.

Samirofi
02-03-2014, 01:19 PM
Gold and Silver Forecast for February 3-7
Gold and silver changed direction and fell last week mainly following the latest FOMC’s decision to cut down again its asset purchase program by an additional $10 billion to $65 billion a month. This mini-taper was expected and yet it still dragged down the prices of gold and silver. Moreover, the U.S economy continues to show slow progress: the GDP (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm) for the fourth quarter grew by 3.2% – a slower pace than the third quarter, but still a good result. Conversely, jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) rose by 19k to reach 348k. For the week of February 3rd to 7th, several reports and events will play out this week including: U.S non-farm payroll report, RBA ECB and BOE rate decisions, U.S ISM manufacturing PMI, and U.S factory orders.


The price of gold declined by 1.95% last week; moreover, during last week, the average price reached $1,251.72/t. oz which was 0.01% lower than last week’s average. Gold ended the week at $1,239.8 /t. oz.


Silver price also plunged by 3.23%; further, the average weekly rate was $19.40/t oz, which was 2.68% below last week’s price.


Herein is a short overview showing the main decisions, reports and events that will unfold during January 27th to 31st and may affect bullion prices.


Let’s breakdown the main events by leading economies:


U.S


The recent FOMC meeting concluded with the FOMC deciding to taper again QE3 by $10 billion to $65 billion a month.


The table below shows the reaction of gold and silver to the FOMC’s decisions in the past couple of years.

http://pcm-fx.com/pcmupload/uploads/1391419076851.jpg (http://pcm-fx.com/pcmupload/)

As seen, the recent FOMC decision may have had an adverse effect on gold and silver. This effect, however, might not last long.


The recent decision didn’t accompany an economic outlook update and press conference. Therefore the minutes of the FOMC meeting, which will be released later this month, could also affect the prices of precious metals.


Looking forward, the upcoming reports will include: NF payroll, factory orders, non-manufacturing and manufacturing PMI indexes, and jobless claims. If these reports present slower growth in the U.S economy, they could pull up the prices of gold and silver. Conversely, the recent appreciation of the US dollar against Euro and Canadian dollar may have slightly dragged down precious metals. Thus, if the U.S dollar continues to rally against the Euro and Canadian dollar; this could moderately drag down the prices of gold and silver. The Euro/USD and precious metals had a very weak correlation in recent weeks (during December/January the linear correlation was only 0.22 – mid-weak correlation; the correlation between USD/YEN and gold is -0.38). These correlations suggest that the U.S dollar had little to do with the shifts of precious metals.


Europe
ECB will decide on its cash rate for February. The current rate is set at 0.25% – the lowest level in Euro Area’s history. The inflation in the Euro Area remains very low (below 2%) and the rate of unemployment elevated at 12%. Moreover, the recent developments in Turkey (see below) could suggest that Europe’s problems are far from over. ECB might decide in the near future to take additional steps in its monetary policy. In the meantime, the Euro/USD could play a secondary role in the progress of the prices of precious metals.

Turkey


The recent devaluation of the lira even after the Turkish central bank hiked its interest rate raised the risk of the Turkish economy. This also could explain why in the past several months Turkey has augmented its gold hoards to over 506 tonnes of gold – recently passing the ECB – and the twelfth largest gold holders worldwide. The rise in demand of this country is likely to have little effect on the global gold demand.


India and China


During the previous week, the Indian Rupee slightly appreciated against the US dollar. If this trend persists, it could positively affect the demand for precious metals in India.


In China, the recent manufacturing PMI dropped to a six month low of only 50.5, which means the manufacturing sectors in China are still growing but the slowest pace in recent months. This week is the Chinese New Year so there will be no major reports on China’s economy.


Finally, gold holdings of SPDR gold trust ETF changed course and rose last week by 0.34%. The ETF is still down by nearly 6% in the past couple of months and 1% since the beginning of 2014. Gold holdings were at 793.155 tonnes by the end of last week. If the ETF’s gold holdings continue to rally, this may signal the demand for gold as an investment is improving.


In conclusion…

Despite the rally of gold price at the beginning of the year, gold is only slightly higher than its initial level at the end of last year. Silver is currently down for 2014. The recent FOMC decision to taper QE3 may have had a modest short term adverse effect on the price of precious metals. Moreover, the ongoing weakness in the U.S equities markets continues to steer investors towards alternative investments such as U.S long term treasuries and precious metals. The upcoming U.S reports such as NF payroll report, factory orders, trade balance, and jobless claims could affect the prices of gold and silver; if they show the U.S economy is slowing down, gold and silver might slightly rally. The rise in volume of trade could reduce the level of volatility of prices. Finally, if the demand for gold and silver as investments continue to improve they could slightly strengthen bullion prices. Therefore, I remain neutral on gold and silver.

Samirofi
02-10-2014, 10:15 AM
Gold and Silver Forecast for February 10-14
Gold and silver recovered last week following the news of the slow progress of the U.S economy: Nonfarm payroll employment rose by only 113k jobs; the manufacturing PMI (http://www.ism.ws/ismreport/mfgrob.cfm) decreased by 5.2 percentage points to 51.3 – this means the manufacturing sectors are growing at a slower pace than in the previous month. This could have been due to the cold weather. Conversely, jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) fell by 20k to reach 331k. In Europe, the ECB (http://www.forexcrunch.com/ecb-leaves-all-rates-unchanged-eurusd-rises/) kept its rate unchanged; in Australia, the RBA (http://online.wsj.com/news/articles/SB10001424052702303442704579363841987609668?mg=ren o64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB1000 1424052702303442704579363841987609668.html) left its rate flat but the outlook seems grim, which could suggest there won’t be additional rate cuts in the near future. These developments could have contributed to the recovery of precious metals prices. For the week of February 10th to 14th, several reports and events will play out this week including: Yellen’s testimony, U.S industrial production, Japan’s current account, EU GDP for the fourth quarter, U.S retail sales, Canada’s budget, U.S federal budget, China new loans, and U.S jobless claims.


The price of gold increased by 1.9% last week; moreover, the average price reached $1,257.74/t. oz which was 0.48% higher than last week’s average price. Gold ended the week at $1,263.2 /t. oz.


The price of silver also rose by 4.35%; further, the average weekly rate was $19.70/t oz, which was 1.54% above last week’s rate.


Herein is a short overview showing the main decisions, reports and events that will unfold during February 10th to 14th and may affect bullion prices.


Let’s breakdown the main events by leading economies:


U.S


The recent NF payroll report showed little growth in the employment for the second consecutive month. Only 113K jobs were added in January and the rate of unemployment fell to 6.6%.


The table below shows the reaction of gold, silver NS USD/Yen to the NF payroll report in the past couple of years.

http://pcm-fx.com/pcmupload/uploads/1392012767031.jpg (http://pcm-fx.com/pcmupload/)

As you can see, the recent NF payroll report may have had a moderate positive effect on gold and silver.


This week, Yellen will testify before House of Representatives and Senate regarding the Federal Reserve’s monetary policy. This testimony could offer some insight behind the future steps of the FOMC and thus may affect the financial markets.


Moreover, several reports will be release this week including: Retail sales, industrial production, UoM Consumer Sentiment, and jobless claims. If these reports present slower growth in the U.S economy, they could positively affect the prices of precious metals. Further, the recent depreciation of the US dollar against Euro and Aussie dollar may have also helped pull up precious metals. Thus, if the U.S dollar continues to fall against the Euro and Aussie dollar; this could moderately drag down the prices of gold and silver. The correlation between Euro/USD and precious metals had strengthened in recent weeks (during January/February the linear correlation was 0.31 – mid-strong correlation; the correlation between USD/YEN and gold is -0.61). These correlations suggest that the U.S dollar had some to do with the developments in the precious metals market.


Europe
ECB left its interest rate unchanged. This week, the EU GDP for the fourth quarter and French Industrial Production will come out. These reports could affect the Euro/USD, which could play a secondary role in the progress of the prices of precious metals.


India and China


During last week, the Indian Rupee appreciated against the US dollar. If this trend continues, it could positively affect the demand for precious metals in India.


In China, the trade balance and new loans reports will be released. These reports could offer some perspective regarding the progress of the Chinese economy. If the Chinese economy continues to slow down, this might imply the demand for commodities in this country is slowing down, which could also curb down the recent rally of precious metals.


Finally, gold holdings of SPDR gold trust ETF rose again last week by 0.49%. The ETF is still down by nearly 5.5% in the past couple of months and 0.5% since the beginning of 2014. Gold holdings were at 797.053 tonnes by the end of last week. If the ETF’s gold holdings continue to rise, this may signal the demand for gold as an investment is improving.


In conclusion…

The recent slowdown in the progress of the U.S economy as indicated by the lower manufacturing PMI and modest growth in NF payroll could have contributed to the recovery of precious metals prices. This may have opened the door for another round of speculations regarding the FOMC’s future steps including the tapering of QE3. Moreover, the ongoing weakness in the U.S equities markets continues to steer investors towards alternative investments such as U.S long term treasuries and bullion. The upcoming U.S reports such as retail sales, industrial production, and jobless claims could affect the prices of bullion; if they show the U.S economy is slowing down, gold and silver might continue to rally. The drop in the US dollar against leading currencies could have also helped pull up precious metals prices. Finally, if the demand for gold and silver as investments continue to increase, they could pull up gold and silver prices. Nonetheless, I remain neutral on gold and silver.

Samirofi
02-17-2014, 08:12 AM
Gold and Silver Forecast for February 17-21
Gold and silver continued to rally last week following the ongoing slowdown in the U.S: retail sales (http://www.census.gov/retail/marts/www/marts_current.pdf) declined by 0.4% during January; industrial production (http://www.cnbc.com/id/101417530) declined by 0.3% in January. Finally, jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) rose by 8k to reach 339k. Janet Yellen, the Chair of the FOMC, testified in the House of Representatives and Senate. She pointed out that if the U.S economy slows down, it could lead the FOMC to implement additional monetary measures, but for now it seems that the FOMC will keep slowly reducing its asset purchase program. In the forex market, the Euro, Aussie dollar and Japanese yen rallied against the USD. This may have also helped pull up precious metals. For the week of February 17th to 21st, several reports and events will come to fruition this week such as: Minutes of FOMC meeting, U.S PPI, China’s new loans, U.S existing home sales, minutes of last RBA meeting, ECOFIN Summit, U.S housing starts, China, and EU’s manufacturing PMI reports, Canada’s retail sales, and U.S CPI.

The price of gold rose by 4.4% last week; moreover, the average price reached $1,295.76/t. oz which was 3.02% higher than last week’s average rate. Gold ended the week at $1,318.8 /t. oz.


The price of silver also increased by 7.45%; further, the average weekly rate was $20.48/t oz, which was 4% above last week’s rate.


Herein is a short overview showing the main decisions, reports and events that will unfold during February 17th to 21st and may affect precious metals prices.


Let’s breakdown the main events by leading economies:


U.S


In her first testimony at the House as Chair of the FOMC, Janet Yellen addressed the issues the U.S economy faces, the FOMC’s current outlook and the measures the FOMC may take in the future – i.e. the FOMC’s monetary policy. The recent slowdown in the labor market is a concern and there is risk in the U.S economy falling to another slowdown. But the slow decline in unemployment is likely to keep the FOMC’s policy on track so that the Fed will continue to taper QE3 in the coming months. The minutes of the FOMC might shed some additional light on FOMC member’s concerns regarding the progress of the U.S economy. Keep in mind that the current inflation is very low – below the FOMC’s target – and the labor market isn’t recovering so fast. These factors could eventually lead the FOMC to consider other measures to positively affect the markets such as increasing the target inflation or pegging the long term interest rates at low level – say 2.5% for 10 bonds. But it’s too early to speculate…


This week, besides the minutes of the FOMC, several reports will come out including: Philly Fed index, CPI, PPI, TIC Long Term Purchases, housing data and jobless claims. If these reports show slower growth in the U.S economy, they could positively affect the prices of bullion. Further, the ongoing depreciation of the US dollar against Euro, yen and Aussie dollar may have also helped rally precious metals. Thus, if the U.S dollar continues to weaken against the Euro yen and Aussie dollar; this could moderately pull up the prices of gold and silver. The correlation between Euro/USD and precious metals had strengthened in recent weeks (during January/February the linear correlation was 0.53 strong correlation; the correlation between USD/YEN and gold is -0.57). These correlations suggest that the fall of the U.S dollar had an effect on precious metals prices.



This week, the EU manufacturing PMI (flash report), German ZEW economic sentiment, and EU Economic Forecast will be released. The EU Summits will also take place this week. These reports and events could affect the Euro/USD, which could play a secondary role in the progress of the prices of precious metals.



India and China



During last week, the Indian Rupee slightly appreciated again against the US dollar. If this trend persists, it could positively affect the demand for precious metals in India.


In China, the manufacturing PMI (flash) and new loans reports will be released. If the Chinese economy continues to slow down, this might imply the demand for commodities in this country is diminishing, which could also curb the recent recovery of precious metals.


Finally, during last week, gold holdings of SPDR gold trust ETF rose again for the third week in a row by 0.53%. The ETF is still down by nearly 5% in the past couple of months but is at the same level as it was at the beginning of 2014. Gold holdings were at 801.251 tonnes by the end of last week. If the ETF’s gold holdings continue to increase, this may signal the demand for gold as an investment is improving.


In conclusion…

The potential slowdown in the U.S could play in favor of the rally of precious metals prices. The upcoming U.S related reports could offer some additional inflation regarding the progress of the economy. The upcoming minutes of the FOMC meeting could shed some light on the FOMC’s future steps and I suspect it could raise the idea that the FOMC is ready to keep tapering QE3. This message could drag down the prices of gold and silver. The drop in the US dollar against leading currencies could have also helped pull up precious metals prices. But if this trend changes direction, it could also cut down the prices of precious metals. The recent rally in the U.S equities markets could also curb down the recovery of precious metals. Finally, if the demand for gold and silver as investments continue to rise, they could pull up gold and silver prices. Nonetheless, I suspect gold and silver may change course and slightly decline as a correction to last week’s sharp rise.

Samirofi
02-24-2014, 01:24 PM
Gold and Silver Forecast for February 24-28
Silver and gold rallied again during last week. The recent U.S reports may have contributed to the slow recovery of precious metals: housing starts (http://www.census.gov/construction/nrc/pdf/newresconst.pdf) and building permits fell by 16% and 5.4%, respectively, during January; existing home sales (http://www.forexcrunch.com/us-existing-home-sales-slide-to-4-62-million-usd-ticks-lower/) dropped to 4.62 million in January; Philly fed (http://www.phil.frb.org/research-and-data/regional-economy/business-outlook-survey/2014/bos0214.cfm) index decreased from +9.4 to -6.3 in February; jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) slipped by 3k to reach 336k. The minutes (http://www.federalreserve.gov/newsevents/press/monetary/20140219a.htm) of the last FOMC meeting didn’t reveal much more information regarding the future plans of the FOMC. In China (http://www.hsbc.com/news-and-insight/emerging-markets), the flash PMI for February declined to 48.3 – the lowest level in months. In the forex market, the Canadian dollar, Aussie dollar and Japanese yen decreased against the USD, while the Euro moderately appreciated. This mixed trend may have contributed to the little rise in the prices of gold and silver. For the week of February 24th to 28th, several reports and events will be released such as: U.S new and pending home sales, U.S GDP for the fourth quarter, China’s manufacturing PMI, EU monetary development, U.S consumer confidence, Australia Private New Capital Expenditure and Canada’s GDP.


The price of gold increased by 0.4% last week; moreover, the average price reached $1,320.94/t. oz which was 1.94% higher than last week’s average. Gold ended the week at $1,323.7 /t. oz.



The price of silver also rose by 1.7%; further, the average weekly rate was $21.73/t oz, which was 6.1% above last week’s price.


Let’s breakdown the main events by leading economies:


U.S


Last week’s release of the minute of the FOMC’s meeting back in January didn’t offer much more information regarding the FOMC’s next steps that was stated in Janet Yellen’s testimony in Congress earlier this month. Janet Yellen will give another testimony this week on February 27th, in front the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. The title of her testimony is Semiannual Monetary Policy Report to the Congress. This testimony is likely to offer similar information to the one provided in her previous testimonies. Looking forward, the next FOMC meeting will be held between March 18 and 19. Until then, the progress of the U.S economy could affect the next FOMC’s decision regarding tapering further QE3.


This week, several reports will come out including: new and pending home sales, core durable good, consumer confidence index, GDP for the fourth quarter and jobless claims. If these reports show slower progresses in the U.S economy, they could positively affect the prices of precious metals. Further, the ongoing depreciation of the US dollar against Euro may have also helped pull up precious metals. Conversely, the Aussie dollar and Japanese yen slipped against the USD. Thus, if the U.S dollar continues to strengthen against the yen and Aussie dollar; this could moderately pull down the prices of gold and silver. The correlation between Euro/USD and precious metals had strengthened in recent weeks (during January/February the linear correlation was 0.50 strong correlation; the correlation between USD/YEN and gold is -0.52). Finally, the US equities market slightly rallied last week. If this trend persists, it could drag back down alternative investments such as gold and silver.


Europe
This week, the Euro Area Monetary Development, German Retail Sales, EU Economic Forecast (flash report), German Business Climate Index, EU CPI and unemployment rate will be released. These reports and events could affect the Euro/USD, which could play a secondary role in the progress of the prices of precious metals.


India and China


During the previous week, the Indian Rupee depreciated against the US dollar. If this trend persists, it could adversely affect the demand for precious metals in India.


In China, the manufacturing PMI (final estimate) report will be released. If the Chinese economy continues to slow down, this might imply the demand for commodities in this country is falling, which could also curb the recent recovery of precious metals.


Finally, during last week, gold holdings of SPDR gold trust ETF changed direction and fell for the first time in four weeks by 0.37%. The ETF is down by nearly 5.32% in the past couple of months and by 0.36% for the year (UTD). Gold holdings were at 798.308 tons by the end of last week. If the ETF’s gold holdings continue to fall, this may signal the demand for gold as an investment is diminishing.


In conclusion…

The ongoing slowdown in the U.S economy especially in housing and labor markets might be enough to improve the demand for investments that are considered safe haven such as gold and silver. The upcoming U.S related reports could offer some additional insight regarding the changes in the economy. If the GDP for the Q4 report falls below the early estimate it could drag down the USD and thus also help rally precious metals. But there are also signs of a potential change in the recent rally of gold and silver: The recent modest recovery of the U.S stocks markets, the appreciation of the USD against the Aussie and yen, the drop in GLD gold holdings for the first time this month. These changes might suggest the recent rally of gold and silver could slow further down or perhaps even change course this week. My guess is gold and silver prices could change course and fall in near future; moreover, if China’s manufacturing PMI also shows a sharp fall to below 50, this could also pull down gold and silver; unless of course the upcoming U.S GDP report and core durable goods disappoint – in such a scenario precious metals could extend their rally a little while longer. Therefore, I remain neutral on gold and silver for this week.

Samirofi
03-03-2014, 07:58 AM
Gold and Silver Forecast for March 3-7
Gold and silver prices slipped during last week. The latest economic reports about the U.S and China may have contributed to the recent developments in the precious metals market: U.S new home (http://www.census.gov/construction/nrs/pdf/newressales.pdf) sales jumped by 9.6%; pending home sales (http://www.realtor.org/news-releases/2014/02/pending-home-sales-hold-steady-in-january) index inched up by 0.1% to 95 during January. Consumer confidence (https://www.conference-board.org/data/consumerconfidence.cfm) rose from 77.3 to 81.7; the U.S GDP (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm) growth rate for the fourth quarter dropped to 2.4%. Finally, jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) rose by 14k to reach 348k. In China (http://www.bloomberg.com/quote/CPMINDX:IND), the PMI for February declined to 50.2 – the manufacturing sectors are growing as a slower pace. In the forex market, the Euro, Canadian dollar, and Japanese yen slightly rose against the USD, while the Aussie dollar moderately depreciated. This mixed trend may have contributed to the modest fall of gold and silver. For the week of March 3rd to 7th, several reports and events will be released such as: U.S non-farm payroll report, ECB rate decision, China’s manufacturing PMI, Australia’s GDP for the fourth quarter, U.S trade balance, U.S ISM manufacturing and non-manufacturing PMI, and U.S factory orders.


The price of gold inched down by 0.16% last week; the average price reached $1,332.46/t. oz which was 0.87% higher than last week’s average rate. Gold ended the week at $1,321.6 /t. oz.


The price of silver declined by 2.57%; the average weekly rate was $21.56/t oz, which was 0.75% below last week’s rate.


Herein is a short overview (http://pcm-fx.com/forums/showthread.php/2239-Gold-and-Silver-Weekly-Outlook) showing the main decisions, reports and events that will unfold during March 3rd to 7th and may affect precious metals prices.


Let’s breakdown the main events by leading economies:


U.S


This week, several reports will be released including: non-farm payroll report, trade balance, manufacturing PMI, non-manufacturing PMI, factory orders and jobless claims. If these reports show little progresses in the U.S economy, they could pull back up the prices of precious metals.


Specifically, the non-farm payroll report tends to have a strong correlation with precious metals prices.

http://pcm-fx.com/pcmupload/uploads/1393818906061.jpg (http://pcm-fx.com/pcmupload/)

The table above shows the reactions of the prices of gold and silver to previous U.SNF payroll reports.


The US dollar depreciated again against the Euro and Japanese yen, which may have also curbed down the decline of precious metals. Conversely, the Aussie dollar slipped against the USD. Thus, if the U.S dollar continues to weaken against the Euro; this could moderately pull up the prices of gold and silver. The correlation among AUD/USD, Euro/USD and precious metals have strengthened in the past couple of months;


The chart below shows the linear correlation among leading currencies pairs and precious metals prices.

http://pcm-fx.com/pcmupload/uploads/1393818906152.jpg (http://pcm-fx.com/pcmupload/)

Europe


This week, the ECB will decide on its interest rate. This decision could affect the Euro. Some suspect the ECB could cut down again its cash deposit rate again. Several reports will be released including: German factory orders, German industrial production, EU retail sales, and Spain’s unemployment rate. These reports could affect the Euro/USD, which could play a secondary role in the progress of the prices of gold and silver.


India and China


During last week, the Indian Rupee slightly appreciated against the US dollar. If this trend continues, it could positively affect the demand for precious metals in India.


In China, the manufacturing PMI (final estimate of HSBC) report will come out. If the Chinese economy continues to slow down, this might imply the demand for commodities in this country is falling, which could also curb the recent recovery of precious metals.


Finally, during last week, gold holdings of SPDR gold trust ETF changed direction and rose by 0.68%. The ETF is up by nearly 0.31% since the beginning of the year (UTD). Gold holdings were at 803.704 tons by the end of last week. If the ETF’s gold holdings continue to pick up, this may signal the demand for gold as an investment is improving.


In conclusion…


The progress of the U.S economy especially in labor and manufacturing sectors might affect the direction of precious metals. If the U.S labor market slowdown again and NF payroll report shows growth of less than 100k, this could pull up gold and silver. The recent modest recovery of the U.S stocks markets and the appreciation of the USD against the Aussie dollar may have pressured down the demand for investments such as gold and silver. Moreover, if China’s economy slows down, it could suggest the demand for commodities such as gold in China will diminish. Conversely, the recovery in the demand for precious metals for investment purposes as indicated in the rise in gold holdings in the GLD gold holdings might pull back up prices of gold and silver. These opposite forces could suggest that gold and silver move in a mixed trend in the near future. Therefore, I remain neutral on gold and silver for this week.

Good Luck :)

Samirofi
03-31-2014, 09:55 AM
Gold and Silver Forecast for March 31- April 4
The gold and silver market continued to cool down during last week. In the U.S, several reports were published and showed mixed signal regarding the progress in its economy: new home (http://www.census.gov/construction/nrs/pdf/newressales.pdf) sales fell by 3.3% during February; pending home sales (http://www.realtor.org/news-releases/2014/03/february-pending-home-sales-continue-slide) also slipped by 0.8% to 93.9; the last estimate of the U.S GDP for Q4 (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm) 2013 was released and was revised up from 2.4% to 2.6%; finally, jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) slightly fell by 10k to reach 311k. China manufacturing PMI (http://www.bloomberg.com/video/hsbc-china-manufacturing-pmi-at-48-1-IqZb2VKrSxeQOYMZyIw_yw.html) by HSBC dropped to 48.1 in March – meaning the manufacturing sectors are contracting. This news may have also adversely affected commodities prices. For the week of March 31st to April 4th, several new items will come to fruition including: FOMC Chair Yellen’s speech, U.S non-farm payroll report, ECB rate decision, China’s manufacturing PMI, U.S trade balance, U.S ISM manufacturing PMI, EU and German retail sales, and U.S factory orders.


The price of gold tumbled down by 3.14% last week; further, the average price reached $1,302.96/t. oz which was 3.34% lower than last week’s average rate. Gold ended the week at $1,294 /t. oz.


Silver price also declined by 2.47%; further, the average weekly rate was $20.72/t oz, which was 4.21% below last week’s price.


Herein is a short overview showing the main decisions, reports and publications that will unfold during March 31st to April 4th and may affect precious metals prices.


Let’s breakdown the main events by leading economies:


U.S


This week, several reports will be released including: non-farm payroll report, factory orders, trade balance, manufacturing PMI, non-manufacturing PMI, and jobless claims. If these reports show signs of progresses in the U.S economy, they could pressure down precious metals prices.


Specifically, the non-farm payroll report tends to have a strong relation with gold and silver prices.

http://pcm-fx.com/pcmupload/uploads/1396245211351.jpg (http://pcm-fx.com/pcmupload/)


The table above presents the reactions of the prices of gold and silver to previous U.SNF payroll reports. In the last NF payroll report, which was better than anticipated, gold and silver tumbled down. If this time, the report exceeds the current expectations, bullion prices could decline further.


Janet Yellen will give a speech this week at the 2014 National Interagency Community Reinvestment Conference in Chicago. The title of the speech is “Strengthening Communities”. Her words carry weight and could stir up the bullion markets especially if she were to address the FOMC’s monetary policy or the progress of the U.S economy.


During last week, the US dollar slightly appreciated against the Euro and Japanese yen, which may have also dragged down precious metals. Conversely, the Aussie dollar and Canadian dollar rallied against the USD. If the U.S dollar continues to strengthen against the Euro and Japanese yen; this could moderately drag down the prices of gold and silver. The correlation among AUD/USD, Euro/USD and precious metals have weakened in recent weeks;


The US dollar slightly appreciated against the Euro and Japanese yen, which may have also dragged down precious metals. Thus, if the U.S dollar continues to strengthen against leading currencies; this could adversely affect gold and silver.


The chart below presents the linear correlation among leading currencies pairs and precious metals prices during March.

http://pcm-fx.com/pcmupload/uploads/1396245211552.jpg (http://pcm-fx.com/pcmupload/)


Europe
This week, the ECB will announce its cash rate for April, which currently stands on 0.25%. The current projections are that ECB will maintain its cash rate unchanged and won’t introduce any new stimulus. On the off chance the ECB will change its policy or even hint of potential future changes, the Euro could decline further, which could drag down commodities prices.


Furthermore, during this week several reports will come out including: EU and German retail sales, Spain’s unemployment report, EU CPI, Spain’s manufacturing PMI, and German factory orders. These reports and events could affect the Euro/USD, which partly affect the direction of gold and silver.


India and China


During last week, the Indian Rupee sharply appreciated again against the US dollar. If this trend persists, it could positively affect the demand for gold and silver in India.


In China, the manufacturing PMI report will be publish and could shed some light on China’s economic progress. In the flash report, the PMI dropped again and was well below 50. If the index continues to decline, it could indicate China’s manufacturing sectors are contracting. This in turn, could indicate the demand for gold and silver in China will weaken.


Finally, during last week, gold holdings of SPDR gold trust ETF remained unchanged. The ETF is still up by 3% in the past couple of months. Gold holdings were still at 816.972 tons by the end of last week. If the ETF’s gold holdings pick up again, this may signal the demand for gold as an investment is strengthening.


Final note

The recent weakness in the gold and silver market is plausibly an ongoing reaction to the last FOMC decision and the recovery of the US dollar. The signs of little progress in China and modest rally of the U.S economy could have also dragged down precious metals. Looking forward, if the U.S economy continues to show signs of recovery, e.g. the NF payroll report exceeds the market expectations, this could pressure further down gold and silver. Moreover, if the US dollar appreciates further against the Euro and Japanese yen, it could drag down gold and silver. Further down the line, I still think the negative market reaction to the FOMC’s decision will dissipate in the near future. The progress of the stock market could also play a secondary role in determining the direction of gold and silver. If the U.S leading equities continue to slowdown, they could also pull back up gold and silver. Therefore, I think gold and silver might decline further this week.

Samirofi
04-07-2014, 11:56 AM
Gold and Silver Forecast for April 7-11
The gold and silver market slightly recovered during last week. The recent non-farm payroll report, in which 192 jobs were added during March, was an improvement from previous months but wasn’t better than expected. The rate of unemployment remained flat at 6.7%. Some expected the rate to fall to 6.6%. This news was enough to pull back up the prices of gold and silver. In the forex market, the U.S dollar slightly depreciated against the Euro and Aussie dollar. This trend may have also contributed to the modest recovery of bullion. In other news, several reports showed mixed signal regarding the progress in the U.S economy: During March, the manufacturing PMI slightly rose by 0.5 percentage points to 53.7, which means the manufacturing sectors are growing at a faster pace than last month; jobless clams (http://www.dol.gov/opa/media/press/eta/ui/current.htm) slightly rose by 16k to reach 326k. Will gold and silver change direction again and fall? For the week of April 7th to April 11th, several reports and events will come to fruition including: U.S JOLTS Job Openings, minutes of FOMC meeting, China’s CPI, U.S PPI, U.S federal budget, China new loans, BOC Business Outlook Survey, and BOE and BOJ monetary policy meetings..


The price of gold slightly rose by 0.7% last week; conversely, the average price reached $1,288.38/t. oz which was 1.12% lower than last week’s average rate. Gold ended the week at $1,303 /t. oz.


Silver price rallied by 0.8%; the average weekly rate was $19.848/t oz, which was 0.01% below last week’s rate.


Herein is a short overview showing the main decisions, reports and publications that will unfold during April 7th to April 11th and may affect precious metals prices.


Let’s breakdown the main events and reports by leading economies:


U.S


Last week’s NF payroll report showed signs of progress and was inline with ADP estimates, but some people expected better results. This was enough to drag down the prices of precious metals. The table below shows the relation between the number of jobs added each month (not revised) and the changes in precious metals prices.

http://myforexforums.com/upload/do.php?img=203 (http://myforexforums.com/upload/)

In the last NF payroll update, which wasn’t better than anticipated, gold and silver rallied


The minutes of the last FOMC meeting will be released this week. Last month, the FOMC decided to taper again its asset purchase program by $10 billion to $55 billion. This news seems to have had an adverse effect on the prices of gold and silver. The US dollar also recovered against major currencies. The minutes could shed some light on this decision, the FOMC’s future monetary plans including raising its cash rate;


Besides the minutes of the FOMC meeting, this week, several reports will be published including: JOLTS Job Openings report, Federal Budget Balance, PPI, and jobless claims. If these reports show signs of progresses in the U.S economy, they could pressure down precious metals prices.


During the previous week, the US dollar slightly depreciated against the Euro Canadian dollar, and Aussie dollar, which may have also pulled up gold and silver prices. On the other hand, the Japanese Yen rose again against the USD. If the U.S dollar continues to weaken against leading currencies; this could moderately pull up gold and silver. The correlation among USD/Yen, AUD/USD and precious metals have weakened in recent weeks;


The chart below presents the linear correlation among leading currencies pairs and precious metals prices during March-April.

http://myforexforums.com/upload/do.php?img=204 (http://myforexforums.com/upload/)

Europe


This week several reports and events will take place: Great Britain Manufacturing Production, French Industrial Production, and BOE Rate Decision, These reports and events could affect the Euro and British pound, which could partly affect the direction of gold and silver.


India and China


During last week, the Indian Rupee remained nearly flat against the US dollar but rallied during most of March. If the rupee resumes its rally, it could increase the demand for gold and silver in India.


In China, the CPI, trade balance, and new loans report will be released and could shed some light on China’s progress. This in turn, could indicate of potential changes in the demand for gold and silver in China.


Finally, during the previous week, gold holdings of SPDR gold trust ETF dropped by nearly 1%. The ETF is still up by 1% since the beginning of the year. Gold holdings were at 809.18 tons by the end of last week. If the ETF’s gold holdings fall again, this may signal the demand for gold as an investment is weakening.


Final note

The recent NF payroll report pulled back up the prices of gold and silver at the end of the week, but during most of the week precious metals moved in an unclear trend. This unclear could continue this week, especially since the minutes of the FOMC meeting will be release and could raise the speculations around the next tapering decision and the timing of raising the cash rate. This report could stir up the bullion market again for a very short period. Besides this report, the other monthly updates referring of China, U.S and Europe aren’t likely to have a strong effect on the forex and commodities markets. If the U.S dollar continues to depreciate against leading currencies, this could pull further up precious metals. Conversely, if the U.S leading equities continue to fall as they did on Friday, this could steer investors back to gold and silver. Therefore, I remain neutral on gold and silver this week.

Samirofi
04-14-2014, 08:02 AM
Gold and Silver Forecast for April 14-18
The gold and silver market rallied again during last week. The bullion market’s recovery was partly due to the recent depreciation of the U.S dollar against leading currencies. The minutes of the March FOMC meeting were released and opened the debate regarding when the FOMC will raise its cash rate. The minutes (http://www.federalreserve.gov/monetarypolicy/fomcminutes20140319.htm) showed there isn’t a clear cut (http://www.federalreserve.gov/monetarypolicy/fomcminutes20140319.htm) consensus regarding the timing so that the current guesses of mid-2015 might not be the timing. This news was enough to rally precious metals. Will gold and silver continue to rally? For the week of April 14th to April 18th, several reports and events will come to fruition including: Janet Yellen’s speech, U.S retail sales, China’s GDP, U.S industrial production, EU industrial production, U.S CPI, U.S housing starts and building permits, China new loans, and Philly Fed index.


The price of gold rose by 1.2% last week; conversely, the average price reached $1,310.18/t. oz which was 1.69% higher than last week’s average rate. Gold ended the week at $1,318.6 /t. oz.


The price of silver remained unchanged; but the average weekly rate was $19.95/t oz, which was 0.53% above last week’s rate.


Herein is a short overview showing the main decisions, reports and publications that will unfold during April 14th to April 18th and may affect precious metals prices.


Let’s breakdown the main events, speeches and reports by leading economies:


U.S


Last week’s minutes of the FOMC meeting were enough to pull back up gold and silver prices and pressure down the U.S dollar. This trend could change course if the Chair of FOMC Janet Yellen will address this issue and perhaps raise the speculations again around the timing of raising the cash rate. She will be giving a speech on Wednesday titled “Monetary Policy and the Economic Recovery” at the Economic Club of New York. If she addresses the FOMC’s monetary policy and hints the FOMC could raise its cash rate as early as mid-2015, this news could drag back down the prices of gold and silver.


Besides Yellen’s speech, this week, several reports will be released including: Retail sales, CPI, Philly Fed index, housing starts, building permits, industrial production, and jobless claims. If these reports show signs of growth in the U.S economy, they could pull back down precious metals prices.


During last week, the US dollar sharply depreciated against the Euro, Canadian dollar, Japanese Yen, and Aussie dollar, which may have also pulled up gold and silver prices. If the U.S dollar further weakens against leading currencies; this could moderately pressure up gold and silver.


Europe
This week several reports will be released: Great Britain CPI, EU Industrial Production, German ZEW economic sentiment, EU CPI, and Great Britain claimant count change. These reports could affect the Euro and British pound, which could partly affect the gold and silver.


India and China


During last week, the Indian Rupee slipped against the US dollar. If the rupee continues to fall, it could decrease the demand for gold and silver in India.


In China, the GDP for the first quarter of 2014, new loans, and CPI updates will be released and could shed some light on China’s growth. This in turn, could indicate of potential shifts in the demand for gold and silver in China.


Finally, during last week, gold holdings of SPDR gold trust ETF declined again by nearly 0.6%. The ETF is still up by 0.4% since the beginning of the year. Gold holdings were at 804.42 tons by the end of last week. If the ETF’s gold holdings drops again, this may signal the demand for gold as an investment is weakening.


Final note

The recent pull back from the latest developments in the U.S might not last long especially if FOMC Chair Yellen talks about the Fed’s policy and hints of the timing of raising the fund rate. Moreover, the upcoming U.S reports could show additional progress, which could also pressure down gold and silver. The drop in demand for gold as an investment, as indicated in the decline in GLD’s gold hoards, could continue and thus pressure down precious metals prices. Conversely, the recent depreciation of the U.S dollar and the shift in market sentiment towards risk aversion could benefit bullion investors. Therefore, I think the volatility of precious metals will pick up this week, but I remain neutral on gold and silver.

Samirofi
06-23-2014, 11:11 AM
Gold and Silver Forecast for June 23-27
The prices of gold and silver resumed their upward trend at the end of last week following the FOMC meeting. The FOMC’s statement had a general dovish overtone; Chair Yellen also kept the tight lid on the Fed’s future plans and dismissed the rise in core CPI (http://www.bls.gov/news.release/cpi.nr0.htm) to 2% as noise. Further, the FOMC, as expected, revised down its economic guidance. All these factors combined were enough to rally gold and silver. Will precious metals keep recovering? This week, several key economic reports will be released including home sales figures, GDP for Q1 (final estimate), PCE, core durable goods, consumer sentient and consumer confidence. So let’s break down the economic calendar for the week of June 23rd to June 27th.


Last week, gold jumped by 3.33%; the price of gold ended the week at $1,316.20/t. oz.


The price of silver also spiked by 6.58%; further, the average weekly rate was $20.16/t oz, which was 4.38% above last week’s price.

http://myforexforums.com/upload/do.php?img=675 (http://myforexforums.com/upload/)

As you can see, the prices of precious metals (normalized to the end of last month) picked up the in the past few weeks. Moreover, the recent spike prices also resulted in a rise in volume of trade as indicated in the chart below.

http://myforexforums.com/upload/do.php?img=676 (http://myforexforums.com/upload/)

Moving towards this week, the aftermath of the FOMC meeting could have some modest lingering effects on precious metals and the USD. Below you can find a review for the main decisions, reports and events that will come to fruition during June 23-27 and may stir up gold and silver prices.


Let’s start with the U.S:


U.S


The recent FOMC meeting seems to have a positive impact on the prices of gold and silver for the first time in a while.


The table below shows the reactions to past FOMC decisions.

http://myforexforums.com/upload/do.php?img=677 (http://myforexforums.com/upload/)

In the previous five meetings the prices of gold and silver fell the day after the release of the FOMC’s decision. This time, the expected tapering of QE3, which was widely expected, didn’t adversely affected gold and silver prices. But the revised down economic outlook and dovish tone of the press release and press conference by Yellen were enough to rally gold and silver.


The FOMC meeting and the press conference showed the U.S economy might not be picking up as many had assumed it is. Yellen also referred to PCE as the estimate the FOMC reviews more closely than the CPI. This week, the PCE will be released. If the core PCE (excluding food and energy) picks up as the core CPI did, this could be a positive sign towards the progress of the U.S economy and might influence FOMC members to reconsider changing to a more hawkish tone. If PCE keeping slowly picking up at a 0.1%-0.2% pace, this could be enough to keep pulling up the prices of gold and silver: Since the FOMC isn’t likely to change its dovish tone; the current low interest rates will be enough to slowly pull up bullion rates.


The GDP estimate for Q1 2014 will be released this week. If the growth rate would be revised down again (the last estimate puts the GDP at a -1% contraction rate, which led to the revised down figures of the FOMC’s GDP growth rate for 2014), this could steer investors towards the yellow metal.


Besides the PCE report and latest GDP estimate, several other economic reports will be published including: New and existing home sales, core durable goods, consumer sentiment, and consumer confidence. If these reports show the U.S economy isn’t progressing, this could also benefit the bullion market.


During last week, the US dollar slightly depreciated against the Euro and Canadian. Nonetheless, the correlations among gold, silver and leading currencies pairs remain weak. Thus, the recent fall in value of the U.S dollar didn’t have much of an impact on gold and silver.
Europe


This week, several reports will be released including: EU manufacturing PMI, German business climate, Great Britain current account, and Germany CPI could affect the British pound and Euro. Since these currencies have kept having a weak relation with the prices of bullion during the past couple of months, they aren’t likely to have a strong effect on gold and silver.

Asia


China’s manufacturing PMI index by HSBC (preliminary estimate) will be released and could indicate the progress of China’s economy. If China’s manufacturing sector will keep picking up, this could be enough to positively impact bullion prices.


During the previous week, the Indian Rupee (http://www.xe.com/currencycharts/?from=INR&to=USD&view=1W) dropped again against the US dollar. If the rupee depreciates further, it could soften the demand for the yellow metal in India.


Finally, during last week, gold holdings of SPDR gold trust ETF slipped by 0.57%. The ETF is still down by 2.32% since the beginning 2014. Gold holdings were at 782.62 tons by the end of the previous week. If the ETF’s gold holdings keep falling, this may signal the demand for gold as an investment is softening.
Takeaway


The recent shift in the bullion market may have partly been driven by the FOMC’s latest statement and Yellen’s press conference. If the U.S economy keeps showing little progress and the core PCE remains low (well below an annual rate of 2%) this could be enough to keep slowly pushing up the prices of gold and silver.

Samirofi
06-30-2014, 08:51 PM
Gold and Silver Forecast for June 30- July 4
Gold and silver slightly rose last week and thus rallied in the past four consecutive weeks. During last week, the U.S GDP (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm) growth rate was revised down to -2.9%. This news may have contributed to the recovery of precious metals prices. Nonetheless, other economic reports were mostly positive: core PCE (http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm) grew again by 0.2%, month over month; new home sales (http://www.census.gov/construction/nrs/pdf/newressales.pdf) increased by 18.6% during May; existing home sales (http://www.realtor.org/videos/existing-home-sales-up-solidly-in-may) also rose last month; consumer confidence index (https://www.conference-board.org/data/consumerconfidence.cfm) rose to 85.2 in June; jobless claims (http://www.dol.gov/ui/data.pdf) slightly fell by 2K to 312K. Alas, these news items may have slowed down the rally of gold and silver. This week, the U.S NF payroll report and ECB rate decision will be the main events. Besides them, several economic reports, decisions and speeches will come to fruition such as: BOC rate decision, Yellen’s speech, EU flash CPI, U.S pending home sales, EU monetary development, U.S, Australia and Canada’s trade balance reports, U.S and China’s manufacturing PMI updates, and jobless claims. So let’s review the economic calendar for the week of June 30th to July 4th.


The price of gold slightly rose by 0.29% last week. Gold ended the week at $1,320/t. oz. Silver also modestly rose by 0.75%; the average weekly price was $21.06/t oz, which was 4.43% above last week’s rate $20.16/t oz.

http://myforexforums.com/upload/do.php?img=745 (http://myforexforums.com/upload/)

(http://www.tradingnrg.com/wp-content/uploads/2014/06/gold-and-jobs-July-2014.jpg)The chart above shows how both gold and silver rallied in the past several weeks (prices are normalized to the end of last month).


Let’s examine the main reports, events and public speeches that could impact the precious metals market during June 30- July 4 starting with the U.S economy


U.S


The main economic report of the week will be the release of the non-farm payroll report.


The table below shows the impact of the past non-farm payroll reports on the changes in gold, silver and USD/Yen currencies pairs in 2013-2014.

http://myforexforums.com/upload/do.php?img=746 (http://myforexforums.com/upload/)

(http://www.tradingnrg.com/wp-content/uploads/2014/06/gold-and-jobs-July-2014.jpg)As you can see, the recent release didn’t have much of an effect on gold and silver prices, as the rise in employment was close to market expectations and remained well above 200K.


If the next report shows another sharp rise in employment, which will be inline with market expectations, the NF payroll report could have a modest negative impact on bullion prices.


Besides the release of this report, Janet Yellen, the Chair of the FOMC, will give a speech at the International Monetary Fund, Washington, D.C. The title of her speech is “Financial Stability”.


It’s unlikely to influence bullion investors, unless she refers to any future plans to change the FOMC policy.


Besides the NF payroll report and Yellen’s speech, several other economic updates will be released such as: pending home sales, trade balance, manufacturing and non-manufacturing PMI, and factory orders. If these reports show the U.S economy is expanding, this could curb down the rally of precious metals.


During the previous week, the US dollar moderately depreciated again against leading currencies including Yen, Euro and Aussie dollar. The correlations among gold, silver and leading currencies pairs have strengthened in recent week, but they remained weak. Thus, the recent drop of the U.S dollar didn’t have much of an effect on gold and silver.
Europe


This week, the ECB decided last meeting to cut its cash rate to 0.15% and deposit rate to -0.1%. This news, however, didn’t have much of a long term effect on the Euro. The current expectations (http://www.forexcrunch.com/eurusd-forecast-jun-30-jul-4/) are that the ECB will maintain its monetary policy unchanged. But if the ECB hints of any future changes to policy this could stir up the forex and commodities markets.


Besides the rate decision, the EU M3 money supply and EU retail sales update will be released this week.


Asia


China’s manufacturing PMI report will be published. The progress of the Chinese economy could indicate the potential changes in China’s demand for gold.


During last week, the Indian Rupee (http://www.xe.com/currencycharts/?from=INR&to=USD&view=1W) slightly rallied against the US dollar. If the rupee keeps appreciating, it could strengthen the demand for the yellow metal in India.


Finally, during the previous week, gold holdings of SPDR gold trust ETF rose by 0.31%. The ETF is still down by 2.02% since the start of 2014. Gold holdings were at 785.016 tons by the end of last week. If the ETF’s gold holdings start picking up, this may signal the demand for gold as an investment is recovering.

Takeaway

The rally of gold and silver prices might reach a wall this week. If the U.S economy keeps improving and the NF payroll shows a rise of over 200K jobs, this could be enough to slowly bring down precious metals prices.

Samirofi
07-14-2014, 04:28 PM
Gold and Silver Forecast for July 14-18
The gold and silver market heated up last week after they didn’t do much in the previous week. The minutes of the FOMC meeting may have partly contributed to the rally of precious metals by the end of last week: The minutes revealed the FOMC may keep the interest rates for a long time until the inflation start to pick up towards the Fed’s target of 2%. This dovish tone may have sparked another rally of gold and silver. Will gold and silver keep heating up? This week, Yellen will testify; the U.S retail sales, PPI, industrial production, housing starts, Philly fed manufacturing index, UoM consumer sentiment. In Europe, EU and GB CPI, German economic sentiment, EU industrial production and Draghi’s testimony are the main weekly events. Bank of Canada will decide on its rate for this month. Finally, in China the GDP for Q2, industrial production, and new loans will be released. So let’s examine the economic calendar for the week of July 14th to 18th.


During last week, the price of gold increased by 1.27%; the average price reached $1,326.88/t. oz which was 0.21% above last week’s average. Gold ended the week at $1,337.4/t. oz.


Silver also rallied by 1.54%; further, the average weekly rate was $21.19/t oz, which was 0.31% above last week’s rate.


Let’s review the main reports that could impact the precious metals market during July 14-18


U.S


The minutes of the recent FOMC meeting may have provided some backwind to the bullion market even though they had little impact on the USD.


The dovish tone in the recent minutes along with Yellen’s comments in the last press conference may have been enough to drive up gold and silver prices. From the minutes of the recent FOMC meeting (http://www.federalreserve.gov/monetarypolicy/fomcminutes20140618.htm):


“The Committee again stated that it currently anticipated that it likely would be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continued to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remained well anchored.”


The phrase “considerable time after the asset purchase program ends” suggests it could be more than a few months until the FOMC starts to raise its cash rate. As long as the market expectations are for no change in the Fed’s cash rate, this may benefit the bullion market by keeping investors in gold and silver – metals that are considered safe haven. Do these metals serve as safe haven? Is the Fed’s policy likely to lead to a spike in inflation in the near term? In my opinion the answer to both questions is no.


But for near future, these developments are likely to benefit the yellow metal.


This week, Yellen’s testimonies before the Senate Banking Committee and House Financial Services Committee during this week could pressure further up the prices of gold and silver. Yellen’s statements in the past FOMC meeting press conference and the minutes seem to have a positive impact on precious metals.


Moreover, several economic reports will be released including Philly fed index, housing starts, building permits, retail sales, industrial production, and UoM consumer sentiment. These reports estimate the progress in consumer spending, manufacturing and housing. If these three aspects of the U.S economy picks up, it could influence the FOMC members in the coming meetings. Also, a recovery of the U.S economy could steer investors towards equities and away from bullion.


During last week, the US dollar slightly depreciated against the Yen and Aussie dollar. It remained nearly flat against the Euro. The correlations among gold, silver and leading currencies pairs have moderately strengthened again last week, but they remained weak.


China


In China several key economic updated will come out this week including: GDP for the second quarter, new loans and industrial production. Since China took the lead from India as the world largest importer of gold, the progress of this economy could hint of the direction of the demand for gold in China is heading. If China’s economy doesn’t pick up, this could impede the growth in demand for bullion.


Finally, during last week, gold holdings of SPDR gold trust ETF rose again by 0.46%. The ETF is still down by 0.15% since the beginning of the year. Gold holdings were at 800.047 tons by the end of last week. If the ETF’s gold holdings keep rising, this may signal the demand for gold as an investment is strengthening.
Final note


Gold and silver are getting back-wind from the dovish policy of the FOMC, which could keep pulling up the prices of gold and silver this week. Even if the Chinese economy doesn’t show much progress, it will only play a modest secondary role in impacting the bullion market. Finally, if the U.S economy keeps recovery, this could pull up equities and thus curb down the rally of gold and silver.

Samirofi
07-28-2014, 04:51 PM
Gold and Silver Forecast for July 28-August 1
Silver and gold resumed their downward trend during most of last week. The recovery of the USD against leading currencies may have contributed to the decline of precious metals. The lack of growth in the U.S equities and the drop in U.S home sales didn’t pull up by much bullion prices by the end of last week. This week, the FOMC will convene again and decide of any changes to policy. In addition, the main U.S economic reports include: Non-farm payroll report, GDP for the second quarter, consumer confidence, manufacturing PMI, PCE, and pending home sales. In Europe, Germany’s retail sales, unemployment and CPI will be released. EU’s flash CPI will also come out. Finally, China’s manufacturing PMI will be released. So let’s review the economic calendar for the week of July 28th to August 1st.


The FOMC members will meet in a two day session, in which they will decide of any changes to policy. The current expectations are that the FOMC will taper again QE3 by another $10 billion. In the past, this news tended to have a negative impact on the bullion market, which is likely to be the case this time as well. Nonetheless, the impact this news has had on precious metals has diminished in recent meetings. Further, the last meeting had a dovish tone, which resulted in a rise in gold and silver prices.


Besides the FOMC meeting, the non-farm payroll report will be released at the end of the week. If the report shows another sharp gain in employment of well above 200K, this could have a negative effect on gold and silver, as it used to have in the past.

http://pcm-fx.com/pcmupload/uploads/1406551781211.jpg (http://pcm-fx.com/pcmupload/)


The U.S PCE will refer to June’s figures and could serve as another indication for the progress of the U.S inflation. If the PCE continues to pick up, this may have a positive impact on gold and silver, as indicated in the chart below.

http://pcm-fx.com/pcmupload/uploads/1406551781482.jpg (http://pcm-fx.com/pcmupload/)

The GDP for the second quarter and manufacturing PMI will be published. They could drag down gold and silver if they meet or exceed the market expectations.


During last week, the US dollar mostly appreciated against the Euro and Yen. If the USD continues to pick up, mainly as the upcoming economic reports show higher than expected results, it could bring down gold and silver.


Finally, during last week, gold holdings of SPDR gold trust ETF change direction and fell by 0.41%. The ETF is up by 0.08% since the beginning of the year. Gold holdings were at 801.844 tons by the end of last week. If the ETF’s gold holdings continues to fall, this may signal the demand for gold as an investment is diminishing.


Bottom line

The tensions in the Middle East and between Russia and U.S could raise the risk level in the markets, which could play in favor of the bullion market. Further, the volatility is likely to pick up. But last week’s fall in gold and silver could resume, if the U.S reports show higher than anticipated results and the FOMC keeps tapering its asset purchase program.

Samirofi
08-04-2014, 06:08 PM
Gold and Silver Forecast for August 4-8
Precious metals fell again during last week until Friday when the non-farm payroll report showed a gain of 209K in jobs – less than market expectations. Earlier this week, the FOMC decided to taper again its QE3 program and had a slightly more hawkish tone to its press release. The GDP for the second quarter was also published and presented a gain of 4% – a 180 degree shift from the first quarter. These news items may have been enough to pressure down precious metals prices. But how will this week play out? This upcoming week, the ECB will decide on its interest rate for August. In Japan, Australia and England the central banks will also convene to decide on their respective cash rate. In the U.S the trade balance, jobless claims and trade balance reports will be out. In Europe, Germany’s factory orders, trade balance and EU retail sales will be released. Finally, China’s PI and trade balance will be published. So let’s examine the economic calendar for the week of August 4th to August 8th.


The FOMC meeting concluded with little surprises as it decided to cut down its asset purchase program by another $10 billion to $25 billion a month. The ongoing drop in the asset purchase program and the slightly more hawkish wording in the recent press release seem to be enough to bring back down gold and silver prices, as indicated in the table below.



http://pcm-fx.com/pcmupload/uploads/1407161256081.jpg (http://pcm-fx.com/pcmupload/)

The GDP for the second quarter was also out and showed a sharp gain in GDP of 4% during the past quarter. This number was higher than anticipated and thus provided some backwind for U.S equities and drag down precious metals prices. But as stated earlier the rise in employment of “only” 209K may have been enough to bring back precious metals enthusiasts to their bullion positions.


Despite the market’s reaction, the U.S labor market is still progressing at a solid pace. If the U.S NF payroll keeps showing a higher than 200K gain in jobs, this could be enough to slowly drag down precious metals prices in the coming months. It seems the deviation from market expectations, however, play a role in the direction of bullion prices on the day of the release of the NF payroll monthly update.


This week, the main U.S reports are related to the trade balance, factory orders and jobless claims; they are likely to have little impact on bullion prices.


During last week, the US dollar appreciated again against the Yen, Canadian dollar and Aussie dollar. If the USD continues to rally, mainly as the upcoming economic reports show higher than expected results, it could further pressure down gold and silver.


In Europe, the ECB will decide on its interest rate for August. The ECB isn’t likely to change its policy in the upcoming meeting, but the press conference with ECB Draghi could stir up the forex markets if he were to refer to any potential changes to ECB’s monetary policy in the coming months or any shift in ECB’s outlook on the progress of Europe’s economic progress.
Finally, during the previous week, gold holdings of SPDR gold trust ETF remained unchanged. The ETF is up by 0.08% since the beginning of 2014. Gold holdings were at 801.844 tons by the end of last week. If the ETF’s gold holdings resumes its downward trend, this may signal the demand for gold as an investment is falling.

Takeaway

The recovery of gold at the end of last week may continue at the beginning of this week, but the general downward direction of gold and silver is likely to progress on at a slower pace on a weekly scale.

Samirofi
08-11-2014, 08:01 PM
Gold and Silver Forecast for August 11-15
Gold changed direction and bounced back mainly on Wednesday, while silver dwindled on a weekly scale. Moreover, on a monthly scale gold is up by over 2% and silver is down by a similar rate (up to date). What is up ahead for gold and silver? This week, the GDP for leading economies including Japan, Germany, and Great Britain will be released. In the U.S PPI, retail sales, industrial production JOLTS, jobless claims and consumer sentiment reports will be published. Finally, in Europe, Germany’s economic sentiment and GB’s inflation report may move the local markets. So let’s analyze the economic calendar for the week of August 11th to August 15th.


This week, the main U.S report is the JOLTS report, which is considered a complementary monthly update to the non-farm payroll report. This is another key figure to examine the progress in the labor market and is highly regards among FOMC members. If the report shows little progress in the number of job opening, this could suggest the growth in the labor market isn’t picking up. In such an event, this could bring down USD and thus pull up gold and silver.


Other U.S reports include retail sales, industrial production and consumer sentiment; they are likely to have little impact on precious metals prices.


The PPI is another indication for the movement in the inflation in the U.S. If this report shows the core PPI is raising; this could be another indication for the rise in inflation pressures. The rise in inflation could increase the demand for gold investments, but this could also improve the odds of the FOMC raising the cash rate – a decision that won’t benefit the bullion market.


In the meantime, the gold reserves in Russia and Turkey have picked up in the past month, as indicated in the table below.

http://pcm-fx.com/pcmupload/uploads/1407772828721.jpg (http://pcm-fx.com/pcmupload/)


Despite the rise in demand for gold in certain central banks, the demand for gold in the private sectors seems to have contacted in the past several weeks.

http://pcm-fx.com/pcmupload/uploads/1407772828872.jpg (http://pcm-fx.com/pcmupload/)


The chart above shows the changes in the amount of gold in the GLD ETF, which is the world’s largest gold ETF. Gold holdings were at 795 tons by the end of last week. This recent fall implies the demand for the yellow metal as an investment has diminished.


But investing in gold ETFs such as GLD isn’t only one option for investing in gold – check out several other options we discussed in a recent podcast.


During last week, the US dollar moved in an unclear trend as it rose against the Euro and Canadian dollar and fell against the Yen and Aussie dollar. If the USD resumed its rally again, mainly as the upcoming economic reports show higher than expected results, it could drag down gold and silver.


In Europe, the ECB will decide on its interest rate for August. The ECB isn’t likely to change its policy in the upcoming meeting, but the press conference with ECB Draghi could stir up the forex markets if he were to refer to any potential changes to ECB’s monetary policy in the coming months or any shift in ECB’s outlook on the progress of Europe’s economic progress.


Takeaway

The detachment of gold and silver isn’t likely to last long so we could see these precious metals move in the same direction again. But this week’s economic reports aren’t likely to stir up the markets so we could see little movement in the precious metals markets with a modest downward trend for gold and silver.

Samirofi
08-18-2014, 03:20 PM
Gold and Silver Forecast for August 18-22
Precious metals resumed their downward trend last week, while the USD and U.S equities rallied. Nonetheless, gold price is still up by 1.8% during August, up to date, but silver is down 4.3%. This week, the minutes of the FOMC meeting to be released on Wednesday and the Jackson Hole Economic Symposium on Thursday and Friday could provide some volatility in the markets. Several economic reports will also come out this week including CPI, housing figures and Philly fed index from the U.S, BOE rate decision and CPI from Great Britain, Japan’s trade balance, China’s manufacturing PMI, and retail sales and CPI from Canada. So let’s break down the economic calendar for the week of August 18th to 22nd.


This week, the main U.S related report will be the release of the minutes of the last FOMC. In the past meeting, the decision followed with a drop in bullion prices. The tone of the press release of the past few meeting seem to shift from dovish to hawkish resulting in a zigzag in the bullion markets following the releases. Perhaps the minutes of the FOMC will release some more hawkish tone, which could bring further down precious metals prices.


In any case, all eyes are headed towards the FOMC meeting in September, which will also have a press conference and could be the one, in which FOMC chair Yellen offers some more information regarding the next rate hike. The current estimates range mostly between the end of the first quarter of 2015 and the end of the second quarter.


The market also seem to estimate, based on the pricing of short term bond rates, further down the road additional rate hikes at a rate of 25pp nearly every Fed meeting, so that the cash rate could reach close to close to 1% by the end of 2015.


These estimates are likely to vary a lot over the coming months and until then, the first rate hike will likely to have a strongest impact on the markets- such a shift isn’t likely to do well for bullion and bring down their prices even further.


Other U.S reports include CPI, existing home sales, housing starts, building permits, and Philly fed index; they are likely to have little impact on bullion prices.


The CPI is a key indication for the progress of the U.S inflation. In the past report, the core CPI reached 1.9% (annually), which is very close to the Fed’s target inflation. If this report shows the core CPI continues to pick up; the rise in inflation could pull up the demand for gold investments, but could also improve the chances of the FOMC raising the cash rate sooner rather than later; the Fed’s decision to raise its cash rate is likely to have a negative impact on bullion prices.


In the meantime, the demand for gold as an investment seems to fall as the amount of gold in the GLD ETF, which is the world’s largest gold ETF has slipped in the past week. The current gold holdings are at 795.597 tons by the end of last week – nearly 0.78% fall since the beginning of the month. This fall suggests the demand for the yellow metal as an investment has diminished.


During last week, the US dollar slightly rallied against the Euro and Yen. If the USD continues to slowly pick up, this turn of events could also pressure down gold and silver.


Takeaway


The recent weakness in the bullion market is likely to keep coming down at a slow pace, especially if the upcoming minutes of the FOMC meeting will present a hawkish tone.

Samirofi
08-25-2014, 10:30 PM
Gold and Silver Forecast for August 25-29
Precious metals prices fell again last week, as the USD pulled up. This week, the GDP for Q2 and PCE will be release in the U.S, which could impact the bullion market. The recent Jackson Hole Symposium ended with Yellen stating again the labor market still has room for recovery, but also left the door open for a cash rate increase at a sooner than expected time. So let’s break down the economic calendar for the week of August 25th to 29th.


This week, the upcoming GDP for the second quarter and PCE reports will be the main economic publications that could move the bullion market.


For the GDP, in the first estimate, the GDP grew by 4.1%. This upcoming estimate, analysts suspect little change as it could come down to only 3.9%. But if the GDP shows a harsher fall and comes down even further, this could pull back up the price of gold. In such a case, silver is likely to follow.


The second report is the PCE, which is another index that estimates the development in the US inflation. In the previous estimate, the core PCE, which excludes energy and food prices, reached an annual rate of 1.5% – nearly unchanged from its past update. The current inflation target is still higher at 2%. So if the inflation picks up, in this report, this could bring up the odds of the FOMC raising the cash rate before the current market expectations of mid-2015. In such a case, this could negatively impact the bullion market over the short term.


Other U.S reports will come out this week including core durable goods, consumer sentiment, pending and new home sales, housing; they are likely to have little impact on precious metals prices.


In the meantime, the demand for gold as an investment changed direction and rallied as the amount of gold in the GLD ETF, which is the world’s largest gold ETF grew in the past week. The current gold holdings are at 800.085 tons by the end of last week – nearly 0.56% from last week but still down by 0.22% since the beginning of the month. This recent rise suggests the demand for the yellow metal as an investment has slightly improved.


The U.S equities are recovering as the S&P500 index rose by 3% since the beginning of August. If the stock markets keep picking up, this could steer more investors away from bullion and into equities.


During last week, the US dollar rallied against the Euro and Yen. If the USD continues to strengthen, this turn of events could further bring down gold and silver.


Takeaway

The upcoming GDP and PCE reports could have some short term effects on bullion prices, but the weakness of precious metals could continue as the USD rallies and the US equities recovers.

Samirofi
09-02-2014, 05:39 PM
Gold and Silver Forecast for September 1-5
The prices of gold and silver didn’t do much last week as they edged up on a weekly scale. But September is starting off with rate decision by ECB, BOE, BOC, RBA and BOJ. The main event will be the ECB rate decision and press conference. In the U.S, the non-farm payroll report will be released on Friday and could stir up the bullion market. Other major reports include factory orders, manufacturing and non-manufacturing PMI reports. So let’s analyze the economic calendar for the week of September 1st to 5th.


Gold and silver inched up by 0.6% and 0.2%, respectively. On a monthly scale gold slightly increased by 0.4%, while silver prices dropped by 4.8%. But precious metals could resume their downward trend this week on account of the upcoming reports to be released most notably the NF payroll report.


The current projections are for another strong monthly gain of over 200K (estimates are at 222K). If the report shows a higher than expected gain, this report could bringing down precious metal prices.


Several additional economic reports will be released in the U.S including factory orders, manufacturing PMI and non- manufacturing PMI. These reports could also provide additional information regarding the progress of the U.S economy. Currently, market estimates show the manufacturing PMI and non- manufacturing PMI are to slightly fall from last month’s levels. But if these reports turn out positive and beat market expectations, they could also slightly drag down gold and silver.


Last week, demand for gold as an investment changed direction again and fell as gold hoards in the GLD ETF, which is the world’s largest gold ETF dropped. The current gold holdings are at 794.999 tons by the end of last week – nearly 0.64% below the previous week and down by 0.85% since the beginning of August. If gold hoards resume their downfall, this could signal the demand for gold as an investment is diminishing.


The US dollar kept recovering against the Euro and Yen. The upcoming ECB rate decision could bring further down the Euro against the USD especially if ECB President Draghi offers some more information about the monetary steps the ECB wishes to take in order to pull up the EU from its current stagnation. Last week’s flash CPI was inline with projections of an annual rate of 0.3% – still a long way from the 2% target the ECB holds. Thus, if the USD strengthens again against the leading currencies, this could further bring down gold and silver.


The U.S equities continue to rally as the S&P500 index added 3.7% in August. If the stock markets keep recovering, this could steer more investors away from precious metals and into equities.


Takeaway

The upcoming NF payroll report and the ECB rate decision could bring up the USD and drag down precious metals. But we aren’t likely to see big moves on a weekly scale. The next FOMC meeting later this month could bring back the volatility of precious metals.

Samirofi
09-08-2014, 07:56 PM
Gold and Silver Forecast for September 8-12


Precious metals, much like other commodities, kicked off last week with a plunge in prices. As the week progressed, bullion prices remained relatively flat even after the ECB surprised the markets with a rate slash and promise of an ABS program. Moreover, the latest NF payroll report fell short of market expectations, but wasn’t enough to pull up precious metals prices. This week, the main reports from the U.S are the JOLTS monthly update and retail sales. In China, several reports will come out including CPI, new loans and trade balance. So let’s breakdown the economic calendar for the week of September 8th to 12th.


Gold and silver prices dropped by 1.6% and 1.7%, respectively. The recent NF payroll report showed only a 142K gain in jobs – well below the market projections of 222K jobs. But the unemployment rate inched down to 6.1% as number of employed fell, while number of people participating in the labor market rose. The next JOLTS report will complete the picture of the progress in the labor market. If the number of job openings reached 4.67 million – a modest gain from the preceding month. The current projections are for 4.72 million job openings. If this number falls short, this could indicate the labor market isn’t progressing faster and thus may bring back up gold and silver prices.


Besides this report, the retail sales report will also come out and show of any growth in the retail market. This could serve as another indicator for the developments in the U.S market. The current projections are for a 0.2% gain in core retail sales.


Last week, demand for gold as an investment tumbled down as gold hoards in the GLD ETF, which is the world’s biggest gold ETF fell. The current gold holdings are at 785.725 tons by the end of last week – nearly 1.17% below the previous week and down by 2% since early August. If gold hoards keep falling, this could signal the demand for gold as an investment is softening.


The recent decision of ECB to slash again its cash rate dragged down the Euro/USD to below 1.3. Last week, the USD rallied against the Euro and Japanese yen, which seem to have had a modest impact on the prices of bullion. In any case, if the USD continues to strengthen against leading currencies, this could adversely impact gold and silver.


The U.S equities slightly rose as the S&P500 index added 0.2% in the past week. If the stock markets resume their upward trend, this could steer more investors into equities.


Takeaway


The bullion market is likely to slow down in the coming days and the prices could show a modest recovery especially if the upcoming JOLTS reports come short of current projections.

Samirofi
09-16-2014, 07:13 PM
Gold and Silver Forecast for September 15-19
Precious metals, much like crude oil, resumed their downfall. This week, the main reports from the U.S are the upcoming FOMC meeting and press conference, Philly Fed index, PPI and CPI, FOMC Chair Yellen speaks, industrial production and housing figures. In Europe the main item on the agenda is the Scottish referendum. Besides this event several reports will be published including GB CPI, German ZEW economic sentiment GB employment report, G20 Summit. But for bullion, the main show will remain in the U.S around the next FOMC meeting. So let’s breakdown the economic calendar for the week of September 15th to 19th.

Gold and silver prices continued to fall; last week, they shed 2.84% and 2.87%, respectively, off their value.

Their recent fall coincided with the weakness in the oil market, and the ongoing recovery of USD. Despite this fall, the demand for gold as an investment rallied as gold hoards in the GLD ETF, which is the world’s biggest gold ETF slightly increased last week. The current gold holdings are at 788.404 tons by the end of last week – nearly 0.34% above the previous week but still down by 1.6% since early last month.

The main event of the week will be the upcoming FOMC meeting, in which the Fed may provide some additional information about its future steps including the rate hike and exit strategy – two issues that could stir up the markets. Also, the FOMC will update its economic outlook and Chair Yellen will hold a press conference following the release of this update. It’s expected that the FOMC taper again its seventh QE3 program by $10 billion to $15 billion a month.

But the timing of raising the cash rate remains unclear and FOMC Chair Yellen is likely to keep this issue in the air due to potential adverse impact this news could have on the markets. Moreover, the past two NF payroll reports weren’t too impressive, which may keep the announcement over the next rate hike unknown.

Nonetheless, Yellen could talk about the exit strategy following the huge rise in the Fed’s balance sheet from its QE programs. In six out of the past seven meetings, the bullion market reacted negatively to the FOMC’s press release.

In most cases, the tone was slightly becoming more hawkish and raised the expectations of rate hike next year. But if this upcoming FOMC statement and press conference turn more dovish, it could pull back up bullion prices – even if for a short term. My guess, however, Yellen won’t provide more information about the rate hike, and the tone of the statement won’t change much – this is likely not to play in favor for precious metals.

Besides this news, the Scottish referendum will take place week. It will revolve about whether Scotland should seek independence. This news doesn’t have a direct link to bullion, but it could stir up the British pound in particular and the forex markets in general. This could also have some ripple effect on other related markets such as commodities.

The U.S equities slightly fell as the S&P500 index dropped by 1.1% in the past week. If the stock markets resume their upward trend, this could steer more investors into equities and away from bullion.

Takeaway

My guess: The bullion market is likely to resume its downward trend by the end the week.

Samirofi
09-22-2014, 10:09 AM
Gold and Silver Forecast for September 22-26
Gold and silver took another tumble as both bullion prices: For gold, it reached its lowest level since the beginning of the year; silver came down below $18 for the first time since August 2010! The latest FOMC meeting had a slightly more hawkish tone than expected albeit no major headlines were released. The other big news item from the week was the Scottish referendum that concluded with Scotland remaining as part of the UK. The sharp gain in the U.S dollar, following these events, was enough to weaken not only precious metals but also other commodities including oil and natural gas. This week, the main reports from the U.S are the monthly update of the core durable goods, home sales data, and last update of the GDP for the second quarter. In Europe the flash manufacturing PMI reports for Germany and France will come out along with German Ifo Business Climate Index. ECB President Draghi will testify before the European Parliament’s Economic and Monetary Committee. Finally, China’s flash manufacturing PMI will be released earlier in the week. So let’s review the economic outlook for the week of September 22nd to 26th.


The latest FOMC meeting provided some headlines such as an end to QE3 program in October; the median federal fund rate estimate for the end of next year was revised up; another member in the FOMC turned in favor of explaining the term “considerable time”.


Alas, all these little headlines didn’t deal head on with the uncertainty around the timing or the pace of the rate hikes expected to come up next year. Nonetheless, these turn of events were enough to drag down precious metals: Gold and silver prices took another nose dive; last week, they fell by 1.21% and 4.13%, respectively.


Their recent fall coincided with strong demand for USD. Further, the demand for gold as an investment declined — gold hoards in the GLD ETF, the world’s biggest gold ETF, fell last week. The current gold holdings are at 7767.404 tons by the end of last week – nearly 1.5% below the previous week and down by 2.33% since the beginning of the month.


The main event of the week will be the economic reports on the progress of the U.S economy including core durable goods and last update of the GDP for the second quarter: In the previous month, manufactured durable goods grew by 22.6% to $300.2 billion back in July, and all manufacturing industries excluding transportation fell by 0.8%. This time, the current estimates for a gain of 0.7% in manufacturing industries excluding transportation.


The GDP in the previous estimate for the second quarter reached 4.2% — slightly above the first estimate and much better than in the first quarter. Back then, the U.S GDP (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm) contracted by 2.9%. The current estimates are that the GDP will slightly rise to 4.6%. If this estimate is beaten and the GDP report shows a higher gain, this could have modest positive impact on the US dollar. The same goes for the core durable goods report. In such a case, precious metals could resume their downward trend.


A couple of housing sales figures will come out this week as well. They may also have a modest impact on the forex markets and consequentially precious metals.


The U.S equities also rallied last week as the S&P500 index rose by 1.2% in the previous week. If the stock markets keep recovering, this could steer more investors into equities and away from precious metals.


Takeaway


My guess: Precious metals are likely to keep falling down at a slower pace.

Samirofi
10-06-2014, 11:48 AM
Gold and Silver Forecast for October 6-10
The latest positive news from the U.S labor market – the NF payroll (http://www.tradingnrg.com/u-s-nf-payroll-grew-by-248k-in-september-gold-silver-tumble-down/) showed 248K jobs added during September and August numbers were revised up to 180K – was enough to drag down the prices of gold and silver to a new low. Gold fell below $1,200 and silver below $17. These selloffs were didn’t vote well for the progress of bullion in the near future. This week, the main reports from the U.S that could move precious metals are JOLTS reports and minutes of the FOMC meeting. Besides these reports, we also have 3 rate decisions in Japan, England and Australia. Additional reports include China’s new loans, Canada’s employment update, Germany factory orders, and GB manufacturing production. So let’s examine the economic outlook (http://www.tradingnrg.com/weekly-outlook-of-financial-market-october-6-10-2014/) for the week of October 6th to 10th:


To complete the picture of the NF payroll report, the JOLTS (http://www.bls.gov/news.release/jolts.a.htm) report will provide another aspect of the labor market from the demand side. It will show if there were any changes in the job openings, hires, and separations. As of last month, there were 4.7 million job openings nearly 22% higher than the same month last year. The current expectations are for a modest gain so that the number will rise to 4.71. If job openings don’t pick up, this could curb down a bit the recent USD rally.


But the main report of the week will revolve around the minutes of the FOMC. Last time, the FOMC members appeared to be slowly leaning more towards raising the cash rate next year a faster than previously expected rate. The importance of the minutes is to examine the general tone of the last meeting, and see if the minutes could offer more insight behind the last decision and future monetary steps.


Last time, following the release of the minutes, precious metals took a tumble the following day. It seems that with every meeting, the members are slowly shifting towards taking more hawkish steps. If this report shows a similar hawkish shift, this could result in another beating for gold and silver.


The forthcoming rate decisions aren’t likely to be too dramatic as BOJ, BOE and RBA aren’t likely to change their respective policy this week. But any changes to guidance or voting that isn’t unanimous could stir up the forex markets.


Following the recent fall in prices, the demand for gold as an investment shark again — gold hoards in the GLD ETF, the world’s biggest gold ETF declined to 767.5 tons by the end of last week – nearly 0.6% below the previous week and down by 3.5% since the end of August.


In the meantime, the ongoing recovery of USD against leading currencies didn’t help commodities including gold and silver. If the USD keeps rising, this could also reduce gold and silver’s shine as an investment.

Takeaway


My guess: Precious metals may see a modest gain as a correction for last week’s sharp losses, but gold and silver are likely to keep coming down on a weekly scale.

Samirofi
10-14-2014, 02:45 AM
Gold and Silver Forecast for October 13 -17
It seems the market was waiting for an excuse to start selling off the U.S dollar after it had spiked in the recent weeks against the Euro, Yen and Aussie dollar. Last week, the minutes of the FOMC meting provided the excuse to start selling U.S dollar, after the FOMC members voiced their concerns about the progress of the U.S dollar and the economic slowdown in the rest of the world. This turn of events also provided backwind for the latest recovery of gold and silver prices, after they tumbled down a week earlier. This week, the main economic updates from the U.S that will be released include: Retail sales, PPI, housing starts, UoM consumer sentiment and Philly fed survey. Chair of the FOMC Yellen will also give a speech on Friday. In Europe, the German ZEW economic sentiment, GB employment update, and EU CPI will be published. China’s trade balance and CPI will also come out. So let’s review the economic outlook for the week of October 13th to 17th:


The minutes of the last FOMC meeting didn’t provide a clear direction from the hawks or the doves of the FOMC. We had it all there. This includes opinions from both sides. Nonetheless, the market seems to have reacted more to the members that voiced their concern about the progress of the U.S dollar in the past few weeks. They also stated their concern about the developments in other leading economies including China, EU, and Brazil. In total, this news along with the revised down IMF global economic projection was enough to bring down gold and silver prices.


This week, the main economic reports from the U.S relate to prices (PPI) consumer sales (retail sales consumer sentiment), output (Philly fed index) and housing (housing starts). If these reports meet their current projections and show signs of progress in the U.S economy, this could provide enough backwind for the U.S dollar to resume its rally. Moreover, they could also drag further down precious metals prices.


Despite the recent recovery in the price of gold, the demand for gold as an investment seem to have contracted again — gold hoards in the GLD ETF, the world’s largest gold ETF fell to 759.44 tons by the end of last week – nearly 1.05% below the previous week and down by 4.5% since the beginning of last month.


Finally, the recent dive the U.S stock market took as the S&P500 fell by 3.1% last week. This recent market reaction also coincided with the rally of GLD and SLV. If the U.S equities change course and bounce back next week, this may also coincide with GLD and SLV’s downward shift.


Final note

My guess: Precious metals are likely to resume their downward trend especially following last week’s modest gain. If the U.S dollar resumes its recovery, gold and silver are also likely to be adversely impacted by this turn of events.

Samirofi
10-27-2014, 08:41 PM
Gold and Silver Forecast for October 27 -31
The recent recovery of the U.S. dollar along with the rally of U.S. equities provided the proper climate to see gold and silver fall down. Moreover, the latest interview given by Bullard gave the necessary excuse to keep the speculations around the FOMC’s next meeting. This also allowed easing down on the hawkish tone of the FOMC from the past meetings. This week the FOMC will convene for its penultimate meeting for the year. The GDP for the third quarter – first estimate will also be released and could crowd out the impact the FOMC statement may have on the bullion market if the GDP doesn’t meet market expectations. In Asia, BOJ’s rate decision and China’s manufacturing PMI will be the main focus. In Europe, ECB’s stress tests results will be released along with EU monetary developments, flash CPI and unemployment rate. So let’s review the economic outlook for the week of October 27th to 31st:


The FOMC will hold its meeting on October 28-29. The statement of the meeting is expected to announce the end of QE3. If Bullard were able to shift the tides in the FOMC and persuade Yellen to keep the QE3 at its current pace – as an open end purchase program, this could have a positive impact on gold and silver prices. Keep in mind, however, this scenario isn’t likely.

http://pcm-fx.com/pcmupload/uploads/1414428043841.jpg (http://pcm-fx.com/pcmupload/)
As you can see, in the past couple of meetings, gold and silver had a strong negative reaction to the releases. Moreover, outside the June meeting, gold and silver most came down the following day of the release during this year. Unless, the wording changes in the upcoming statement, the reaction is likely to remain the same – gold and silver slowly come down.


U.S. GDP for the third quarter will also be released on Thursday. In the last estimate the U.S GDP grew by 4.6% in the second quarter. If the US gross domestic product doesn’t pick up, this could reduce the odds of the FOMC turning more hawkish and thus pull up gold and silver; the current estimates are for the GDP to grow by 3.1%. Anything lower than this number and we may see bullion prices rally.


The personal consumption expenditures index is another measure the FOMC follows to assess the U.S. inflation. Last month, the core PCE (excluding food and energy) edged up by 0.1%. On an annual rate, the core PCE rose by only 1.5% – still well below the 2% target. If the inflation starts to rise, this could positively impact gold and silver prices.


Following China’s GDP report from last week, the manufacturing PMI will be next for the week. If it shows little progress, then this could suggest China’s economy, while still growing (as the PMI is expected to remain at 51.1), isn’t growing any faster. This turn of events isn’t likely to help pull up gold and silver.


During last week, the demand for gold as an investment sharply declined — gold hoards in the GLD ETF, the world’s largest gold ETF fell to 745.38 tons by the end of last week – nearly 2% below the previous week and it’s also down by 3.5% since the beginning of the month.


Finally, the recent recovery the U.S stock market experienced as the S&P500 rose by 4.1% last week. This recent market reaction also coincided with the drop of GLD and SLV. If the U.S equities keep recovering, this may also coincide with GLD and SLV’s decline.

Takeaway

My guess: The FOMC won’t present any major changes so QE3 will end, which is likely to bring further down gold and silver. But the U.S. GDP for the third quarter could shuffle the cards and pull back up gold and silver in the unlikely, yet very plausible, event of GDP falling well below 3% – say 2%-2.5%. Bottom line: I suspect precious metals will resume their downward trend.

Samirofi
11-24-2014, 04:00 PM
Gold and Silver Forecast for November 24-28 <br />
The prices of gold and silver recovered again in the past week mainly by the end of the week following the recent decision from Beijing to slash the...

Samirofi
12-01-2014, 06:47 PM
Gold and Silver Forecast for December 1-5


The recovery of precious metals came to halt last week as both gold and silver prices tumble down by around 2% and 5%, respectively. This week the main report of the week is the NF payroll report, which could impact the direction of gold and silver. Also, ECB will announce of any changes to its rate and monetary policy. Besides these issues, this week, other events and reports include: U.S. manufacturing PMI, factory orders, trade balance, China’s manufacturing PMI, Australia’s GDP for Q3, MPC, RBA and BOC rate decisions, and Germany’s factory orders. So let’s breakdown the economic outlook for the week of December 1st to 5th:


The recent cool down in the precious metals market coincided with the drop of other commodities prices such as crude oil. U.S. dollar slightly weakened against leading currencies such as yen and Euro.


This week, however, the direction of precious metals may be impacted by the release of the NF payroll report.

http://pcm-fx.com/pcmupload/uploads/1417445235571.jpg (http://pcm-fx.com/pcmupload/)


The table above presents the relation between gold and silver to changes in NF payroll during the past couple of years.


As you can see, precious metals tend to have a negative relation to U.S. employment especially when the number of jobs added comes short of expectations. Last time, the NF payroll report was positive with a gain of 214K jobs but was lower than expected so that gold and silver had a positive reaction.


This week, the current estimates are for a gain of 225K. A lower growth rate could result in another bounce in precious metals prices.


This week, the manufacturing PMI report will be release and could provide additional information regarding the progress of the manufacturing sector. Keep in mind, however, this report seems to have a smaller impact on the bullion market than the NF payroll. In any case, the current expectations are for a fall in the PMI to 57.9 – in the previous month the number was at on 59. If the number falls below the current projections, this may adversely impact commodities prices including gold and silver.


Besides the U.S. manufacturing PMI, factory orders and trade balance reports will be released. These are additional reports that could impact the direction of the U.S. dollar.


In Europe, the ECB will announce of any changes to its policy. ECB President could provide some additional guidance about the ECB’s asset purchase program; if so, his words could bring further down the Euro against the U.S. dollar, which could be another pull back for precious metals.


In China, the manufacturing PMI reports by China and HSBC will come out. The progress of China’s economy is another factor to consider its impact on the demand for commodities including gold and silver.


Earlier this week, the Swiss referendum concluded with voters overwhelmingly declined a proposal to boost central bank gold reserves, which is likely to have provided another reason for a tumble in gold and silver prices at the beginning of the week.


During last week, gold holdings in the GLD ETF dropped again to 717.627 tons by the end of previous week –a 0.46% fall; it’s also 7.1% lower than its levels recorded at end of September.


Takeaway

The weakness in the bullion market is likely to continue especially if the U.S. economy keeps showing signs of recovery. Any short comings could result in a short term bounce back in gold and silver prices but the general direction is likely to remain downwards.

Samirofi
12-08-2014, 05:20 PM
Gold and Silver Forecast for December 8-12
The bullion market showed high volatility as gold and silver rallied during most of the week until the end when the non-farm payroll report showed a higher than expected gain in number of jobs. This week the JOLTS report will be released and will provide another indicator for the U.S. labor market’s status. In Europe the second LTRO will be the main event of the week and could impact not only the Euro but also commodities prices. Besides the above-mentioned events, this week include: U.S. retail sales, EU industrial production, China’s new loans and CPI, U.S. PPI, Japan’s GDP for Q3, and U.S. consumer sentiment. Here is the economic preview for December 8th to 12th:


Last week’s recovery came after the gold and silver tumbled down a week earlier. This modest gain could change course again especially in times of high volatility as presented in the foreign exchange and commodities markets. This rally also changed course on Friday following the better than expected NF payroll report, in which 321,000 jobs were added. The table below shows the reaction of precious metals in the past couple of years to the news of the jobs market.

http://pcm-fx.com/pcmupload/uploads/1418044832951.jpg (http://pcm-fx.com/pcmupload/)


The correlations are negative so that gold and silver tend to follow the news from the labor market. Moreover, the correlations among the month to month change in the number of added jobs and precious metals prices also have a mid-strong negative correlation. At face value, if the number of added jobs rises on a month over month basis and the numbers exceed the expectations; this tends to correspond to the decline of gold and silver on the day of this release.


This week, the JOLTS report will also be published and will provide anther key indicator to the changes in the labor market. This report tends to get less traction than the NF payroll, but it’s still an important report worth noticing that the FOMC follows. The current expectations are for the JOLTS to rise and reach 4.81 million open jobs – back in the previous month this number was at 4.74 million.


Another positive gain in the labor market could bring further down gold and silver.


Besides this report, in the U.S. the PPI consumer sentiment and retail sales reports will be released. They could provide additional information regarding the progress of the U.S. economy.


In Europe, the targeted LTRO will take center stage. This is the second tranche of the ECB to lend cash to banks so they could lend it to boost the economy. In last week’s ECB rate decision, Draghi kept things close to the vest while clinging on to his “wait and see” approach. But his tone was still dovish enough to bring down the Euro/USD. He also hinted a potential quantitative easing program that could start by 2015. This event could move markets most notably the Euro/USD, which is correlated to gold and silver. If the Euro keeps falling against the U.S. dollar, this may bring down bullion prices.


In China, the trade balance, CPI and new loans monthly updates will be released. China’s economic progress is another factor in determining the changes in the physical demand for precious metals.


The Euro fell against the U.S dollar by 1.6% (on a weekly scale); the Australian dollar also depreciated against the U.S dollar by 2.9%; the yen depreciated against the U.S dollar by 3.4%. The correlations between these currencies pairs and precious rates remained moderately mid-strong: during the month the correlation between USD/Yen and gold reached -0.34; the correlations between Euro /USD and gold reached 0.42. These correlations suggest the recent developments in the forex markets may have had a modest effect on the shifts in gold and silver.


Gold holdings in the GLD ETF changed direction and rose to 720.914 tons by the end of previous week – a 0.46% gain; it’s still 6.6% lower than its levels recorded at end of September.


Takeaway

The high volatility in the bullion market may ease down, but the recent seesaw motion could continue to build up until the upcoming FOMC meeting. Until then, if the U.S. economy keeps showing signs of recovery including in the labor market, this is likely to bring down gold and silver. Finally, the changes in the Euro could also play a secondary role in curbing a possible recovery of precious metals.

Samirofi
12-22-2014, 11:03 AM
Gold and Silver Forecast for December 22-26
The bullion market cooled down again last week even though the recent FOMC statement was relatively balanced and the market’s reaction was relatively calm. This upcoming short week is likely to entail low volatility as the year is winding down. The main reports for the week include: U.S. GDP for Q3 (final estimate), core PCE, new home sales, core durable goods and existing home sales. Here is an economic preview for December 22nd to 26th and a rundown of last week’s main events.


Last week’s FOMC meeting concluded with, as expected, a change in the wording of the statement: The FOMC omitted the term “considerable time” with reference to the timing of the first rate hike. But the FOMC also hedged this omission by switching the term with another one – patience. And they also stated that it should be considered a clear continuous of the current policy, i.e. the decision to raise rates is only data driven and could take time until the next one will occur. So this “musical chairs” game with wording resulted in the statement being a bit convoluted. All in all, it didn’t lead to big reaction from gold and silver that remained relatively stable during the release of this statement, as you can see in the table below.

http://pcm-fx.com/pcmupload/uploads/1419231717791.jpg (http://pcm-fx.com/pcmupload/)


It seems that the FOMC statement was accepted as relatively balanced and as such didn’t have a strong adverse impact on gold and silver. Also, precious metals already dropped in the days leading to the statement.


Despite the modest reaction in gold and silver to this news, the U.S. dollar did have a strong reaction to this news as it sharply rose against the Euro and Japanese yen. The recovery of the U.S. dollar may have, on a weekly scale, brought down gold and silver. This trend could continue, in which U.S. dollar rallies against leading currencies. Last week, U.S. dollar appreciated against the Euro, yen and Aussie dollar by 1.8%, 0.7% and 1.4%, respectively.


This week, the U.S. GDP, core durable goods, and core PCE will be released and they may have a short term impact on the prices of gold and silver. For the GDP, the current market estimates are for a modest bump in the current growth rate figure of 3.9%. This news may have a modest impact on the direction of precious metals. The PCE and core PCE are expected to come up. But as long as the core PCE remains well below 2%, it’s likely to keep the FOMC on the fence as to whether to raise rates in 2015.


Since this week is expected to be short, the volatility in the precious metals markets is likely to slowly subside. Even though, during the holiday season there could sudden surprises and a spike in volatility as was the case in the recent Thanksgiving holiday with oil prices.


By the end of last week, gold holdings in the GLD ETF declined to 724.552 tons– a 0.16% slip; it’s also 6.2% lower than its levels recorded at end of September.


Takeaway

The bullion markets is expected to future weak, especially if the U.S. dollar keeps coming down and the U.S. data figures are better than expected. The FOMC didn’t make it clear when the next rate hike will occur but for now this ambiguity is keeping gold and silver from plummeting down. The expected low volatility in the coming couple of weeks is likely to keep precious metals close to their current levels.

Samirofi
01-05-2015, 07:11 PM
Gold and Silver Outlook for January 5-9
The prices of gold and silver took another tumble to end the year on a negative note. This week will the first full working week of 2015 that is likely to see a rise in volatility. This week the main reports of the week are the NF payroll report and minutes of the last FOMC meeting – both reports could move not only U.S. dollar but also bullion prices. Besides these updates, this week, other reports will be released including: U.S. non-manufacturing PMI, EU flash CPI, U.S. factory orders, U.S. trade balance, China’s CPI, , and Germany’s factory orders.. Here is an economic preview for January 5th to 9th, 2015:


This week we have two main reports that will be released in the U.S – non-farm payroll and minutes of the FOMC meeting. Let’s start with the minutes.


Last month, the FOMC meeting concluded with a lot of changes to the wording for the statement but resulted in little impact on the bullion market.


The FOMC aimed towards keeping the markets calm without revealing its hand with a balanced message that didn’t lean towards the hawks or the doves. Moreover, the FOMC omitted the “considerable time” phrase as a policy guideline, but still left it as reference for the current policy. The statement was a bit convoluted and didn’t provide much new information about the next move of the Fed. So we don’t know much more about the next FOMC rate hike, i.e. the prices of gold and silver aren’t moving anywhere.


The minutes may offer insight behind the previous statement, which had the most dissenters in recent years.


Any hint of the FOMC turning move hawkish as more members consider raising rates sooner than market expectations (currently around mid-2015) could bring further down the prices of gold and silver. Any dovish tone could do the opposite.


The other main report of the week is the NF payroll that will released on Friday. In the last employment report, the number of non-farm payroll employment grew by 321K – higher than market expectations; the U.S unemployment rate didn’t’ change, however, at 5.8%.


If the upcoming report shows another strong gain — current estimates are at 241K – and this new could take another hit at the prices of gold and silver.


Other reports worth noticing include: U.S. trade balance, EU flash CPI, China’s CPI, Germany’s retail sales, U.S. factory orders and U.S. non-manufacturing PMI. These reports could play a role in moving major currency pairs, which, in turn, may also correlate with the progress of gold and silver.


By the end of the last week, gold holdings in the GLD ETF declined to 709.019 tons– a 0.46% fall; it’s also down by 1.5% for 2014.


Takeaway

The recent fall in the prices of gold and silver may have been related to end-of-the-year trading and low volume that could, at times, lead to sudden sharp falls or gains – depending on the situation. The main events of the weeks could still have an impact on the prices of gold and silver: The NF payroll report could bring down bullion prices if the report shows another high gain in employment. The minutes of the FOMC could move the market especially if they were to reveal the FOMC is actually leaning towards one way. My guess, gold and silver will bounce back, even if for a short time.

Samirofi
01-13-2015, 02:06 PM
Gold and Silver Outlook for January 12 -16
Gold and silver kicked off the year on a positive note as both precious metals rallied during last week. The release of the minutes of the FOMC meeting from December didn’t seem to have a strong adverse impact on bullion prices. The minutes reveled that some FOMC members consider a slower pace of rate hike following the first rate increase. Also, the NF payroll report (http://www.tradingnrg.com/u-s-nf-payroll-increased-by-252k-in-december-gold-silver-see-gains/) came out last week – while it was still positive with 252K jobs added and unemployment falling again to 5.6%, the growth in jobs wasn’t far off market expectations. Thus, gold and silver didn’t so much on Friday. This week the main reports are the JOLTS, retail sales and CPI. Besides these reports, this week, other reports include: U.S. PPI, EU industrial production, GB CPI, Philly Fed index, U.S. consumer sentiment, China’s news loans, European Court of Justice Ruling and U.S. industrial production. Here is an economic preview (http://www.tradingnrg.com/weekly-outlook-of-financial-market-january-12-16-2015/) for January 12th to 16th, 2015:


Last week’s NF payroll report showed another strong monthly gain in jobs, but it also presented an ongoing little growth in wages – only 1.7% gain, year over year. The rate of unemployment slipped again to 5.6%, which is the lowest level in recent years.


But the market’s reaction wasn’t too positive, as the U.S. dollar depreciated against the Yen; precious metals rallied.


The table below shows the reaction of gold and silver prices to previous NF payroll reports and the linear correlation between bullion prices and the changes in number of jobs. Nonetheless, the correlations are stronger when examining the gap between NF payroll gain and market expectations and shifts in bullion prices.

http://pcm-fx.com/pcmupload/uploads/1421143524461.jpg (http://pcm-fx.com/pcmupload/)


Looking forward, the JOTLS report will be another update that will provide another indication about the progress in the labor market. This report is also closely followed by FOMC members, albeit it tends to have a lesser effect on precious metals prices. Last month, the number of jobs opening rose to 4.83 million for November; current market predictions are that the number grew again to 4.91 million in December. A positive report in the labor market could bring down gold and silver.


The U.S. CPI is another important report that measures the U.S. inflation. If the U.S. inflation continues to come down it could suggest the demand for investments such as gold and silver will diminish.


Other reports worth looking out: retail sales, jobless claims, PPI, Philly Fed index, consumer sentiment, and industrial production. These reports could play a secondary role in moving gold and silver via their relation to the U.S. dollar. After all, the correlation between the U.S./Yen and gold is still relatively strong and negative at -0.41.


By the end of the previous week, gold holdings in the GLD ETF fell again to 707.821 tons– a 0.17% drop; it’s also down by 0.63% for the year.


Takeaway


The recovery of gold and silver could continue if the U.S. dollar keeps coming down against leading currencies including yen and Aussie dollar. The U.S. economy shows signs of progress, but it doesn’t rise by a much faster pace than market estimates. This is also likely to play in favor of precious metals. Finally, the potential fall in U.S. CPI doesn’t play in favor of gold and silver – if the CPI does fall by a much larger scale than market estimates, this could have an adverse impact on gold and silver.

My guess, gold and silver will keep slowly recovering in the short term.

Samirofi
02-02-2015, 09:12 PM
Gold and Silver Outlook for February 2-6
Gold and silver took a tumble last week. The FOMC meeting didn’t have any big announcements but the bullion market reacted with a sharp fall in gold and silver the next day. On Friday, however, the GDP report was released and showed a lower than expected growth rate – on that day, precious metals bounced back as the US dollar depreciated against leading currencies. This week the US non-farm payroll will be the main report for gold and silver. Other reports to consider include: US manufacturing PMI, PCE, and factory orders, Here is a preview for February 2nd to 6th, 2015:


The main report of the week is the non-farm payroll report. The current estimates are for 252K. If the NF payroll comes short of this number, gold and silver could see a rally on Friday. Otherwise, precious metals could take another tumble.


Last week’s FOMC meeting was concluded with little changes to the wording of the statement. Despite the little changes to the wording, the price of gold and silver tumbled down.

http://pcm-fx.com/pcmupload/uploads/1422897054981.jpg (http://pcm-fx.com/pcmupload/)

This time, the term considerable time was omitted and the new buzz word was “patience”. So now the FOMC is trying to keep its options on the table when it comes to timing of raising rates. The thing is, it seems less likely for the Fed to change course and push forward the first rate hike to end of the year.


It’s not unheard of the FOMC to come with surprise announcements – such as the start of QE3 or the end of it back in 2013. But to surprise the markets by not following through with its decision to raise rates – make less sense. For one, the whole idea of surprising the markets is to change market expectations and suggest that the Fed is capable of being “reckless” if needed and let the inflation crawl in the economy and pick up. But this hasn’t been the Fed’s goal throughout the past year. Albeit the FOMC has done in the past moves that could have pushed up the inflation pressure (QE, low rates, shifts in balance sheet, and promise to keep rates low for a long time), but those days seem to be over.


So after steering the market expectations towards a rate hike in mid-2015, why will FOMC chair Yellen back down? Answer – she won’t.


Sure, it’s still not a 100% guarantee for a rate hike in June. But unless the US economy takes a shift to the worse or the core inflation tumble down below 1% or the labor market cools down; then we are likely to see a rate hike in the coming months. The implied probabilities derived from the bond yields still suggest a rate hike in the next few months.


By the end of last week, gold holdings in the GLD ETF spiked again to 758.3 tons– 2.3% gain, week over week; it’s also up by 6.5% for the year, up to date.


Final note


Despite the recent plunge in gold and silver, they are still up for the year – 8% and 10.5%, respectively. If the next NF payroll report shows another strong monthly report, this could drive further down gold and silver. So we could see a modest fall in precious metals on a weekly scale.

Samirofi
02-16-2015, 10:54 PM
Gold and Silver Outlook for February 16 -20
In the past week the price of gold slightly declined, while silver prices bounced back mainly on Friday. Nonetheless, the recovery of precious metals came to a halt this month after their strong performance back in January. Will their recovery restart anytime soon? This week, the minutes of FOMC meeting will be released. Other US reports include: PPI, jobless claims, industrial production, housing starts, Philly Fed index, consumer sentiment; Japan’s trade balance and GDP for Q4 will be published. And in Europe, the minutes of ECB policy meeting, the German ZEW economic sentiment, Euro-group meetings, German flash manufacturing PMI will be the main events. Here is a preview for February 16th to 20th, 2015:


The rise in the tensions between Greece and ECB may have contributed to a higher uncertainty levels in the markets and to the weakness of the Euro. So far this month the USD rallied against major currencies including Euro and Japanese yen. The stronger USD continues to curb down the recovery of the gold and silver.


Also, the implied probabilities derived from the bond yields have increased again last week and reached 20% for a rate hike in June and 43% chance in July. These numbers are higher than the probabilities recorded in a month ago. As a result, long term yields have picked up in the past week, which may have also weakened precious metals. If these trends persist, they could pressure further down gold and silver.


This week, the minutes of the last FOMC meeting will be released. If the report turns to be more hawkish than expected and provide additional hints regarding the next rate hike of the FOMC, this could bring down gold and silver. Besides this report, the main reports in the U.S. include Philly fed index, housing starts, PPI and industrial production. If the reports show the US economy keeps improving, they could further strengthen the USD and thus adversely impact bullion prices.


By the end of the previous week, gold holdings in the GLD ETF changed direction and fell to 768.26 tons – 0.65% fall, week over week; it’s still up by 7.9% for the year, up to date.


Takeaway

The bullion market didn’t do much in the past few weeks after kicking off the year on a positive note. The recent economic reports from the U.S. have raised the odds of the FOMC hiking its cash rate in the second half of 2015. The minutes of the FOMC meeting could provide additional insight behind the last meeting. But for gold and silver to resume their rally, they will have to see a further rise in the uncertainty in the markets, e.g. the continuation of the tensions between ECB and Greece, and for the US dollar’s recovery to reach an impasse. This could happen if the US economic reports don’t meet market expectations. Therefore, a short term and modest rally in the gold and silver is plausible. But the market conditions and expectations need to change.

Samirofi
02-24-2015, 08:32 PM
Gold and Silver Outlook for February 23 -27
The bullion market took another beating last week as both gold and silver tumbled down mainly at the beginning of the week. Even the slightly dovish toned minutes of the FOMC meeting didn’t bring much up gold and silver. This week we can look forward to Yellen testifies in Congress, second estimate of GDP for Q4, China’s manufacturing PMI, U.S. existing, pending and new home sales, EU Monetary developments, U.S. durable goods, final EU CPI estimate, Draghi testifies, U.S. consumer confidence and UoM consumer sentiment. Here is a preview for February 23rd to 27th, 2015:


The minutes of the last FOMC meeting were a bit more on the dovish side, but the precious metals markets didn’t react much to this report and only slightly rally following the release. Gold and silver took another dive last week with gold shedding down 1.8% off its value and silver 5.9%.


Nonetheless, the implied probabilities, which are derived from the bond yields, didn’t change much and the odds given by the market for a July rate hike are 39% — a bit lower than last week but still up for the month. In total, long term yields have gone up in the past week, with the 10 year yields reaching 2.13 and 30 years 2.73. These levels are close to the levels recorded at the beginning of the year. If yields were to keep coming up, this could bring further down gold and silver.


Looking forward, FOMC Chair Yellen will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee on Tuesday. Her words could move the markets especially after the release of the last minutes of the FOMC meeting. If the testimony were to be a bit more hawkish in light of the stronger NFP report, this testimony could bring further down gold and silver prices. In regards to the U.S. reports, the GDP for Q4 second estimate will be released and the CPI for last month. These reports could also move the U.S. dollar and precious metals. If the U.S. GDP comes higher than expected, this could be another positive indication for the progress of the U.S. economy, which may positively impact USD. A stronger USD could coincide with a weaker bullion market.


Speaking of testimonies, ECB President Draghi will also testify this week on the ECB Annual Report before the European Parliament. Considering the recent drama we had in Europe revolving the Greek debt crisis, this testimony could also provide some more input behind the latest EU developments.


For now, the Greek crisis seems to have been diverted. The Greeks still need to submit on Monday a list of reforms they will have to implement to the EU members for their approval. It seems that the Germans won this round with no cancelations of the major austerity measurements.


By the end of last week, gold holdings in the GLD ETF slightly rose to 771.249 tons – 0.39% gain, week over week; it’s also up by 8.3% for the year, up to date.


Takeaway

The ongoing rise in U.S. interest rates and the diffusion of the situation in Europe over the Greek exit have brought down gold and silver. If this week Yellen continues to voice a bit more hawkish tone about the next rate hike and the progress of the U.S. economy, this could pressure further down precious metals.

Samirofi
03-09-2015, 03:43 PM
Gold and Silver Outlook for March 9-13
The prices of precious metals took another beating especially after the NFP payroll report was released on Friday and exceeded market expectations. The JOLTS, retail sales, PPI and consumer sentiment are the main U.S. reports to be released this week. In Europe, Euro group meetings, GB manufacturing production, and French industrial production are among the main events and reports. China’s new loans, industrial production and CPI reports will also be published this week. Here is an outlook for March 9th to 13th, 2015:


Even though the NFP report was better than expected, the U.S. labor market has more room for improvement especially in terms of wages. The recent report showed a gain of 1.9%, year over year.

http://pcm-fx.com/pcmupload/uploads/1425901343331.jpg (http://pcm-fx.com/pcmupload/)


The table above presents the changes in the labor market and the reaction of gold and silver prices. As the labor market continues to improve, however, the chances of the FOMC hitting the rate hike button are picking up.


Based on the recent developments in the U.S. bond market, the implied probabilities, have risen to 45% chance of a rate hike in July and 66% of a rate gain in September. These numbers are higher than the probabilities recoded in the previous week.


Following the release of the non-farm payroll report, the JOLTS report will be release – another report that provides an update on the number of job openings, among other data. This report tends to have a lesser impact on bullion market, compared to the NFP report, but this is still a report that the FOMC closely follows – as it provides another indication for the direction the labor market is heading.


Besides this report, other U.S. economic reports that will be published this week include retail sales, consumer sentiment and PPI. If these reports show the U.S. economic activities are heating up, they could contribute to the weakness of gold and silver.


The weakness in the gold market has already started to steer away bullion investors from this precious metal: by the end of last week, gold holdings in the GLD ETF tumbled down by 2% to 756.32; despite the recent fall in this ETF’s gold holdings, its holdings remain up by 6.2% for 2015, up to date.


Where gold and silver are heading?

Following the recent developments in the U.S. including the strong NFP report, the dovish tone of Janet Yellen’s testimony, the growth in wages all point towards a potential rate hike in the coming months. The recovery of the U.S. dollar is another development that keeps dragging down bullion prices. For now, gold and silver are on the ropes and unless the market sentiment chances course – perhaps a few economic reports from the U.S. showing slower than expected growth — bullion prices are likely to resume their slow descent.

Samirofi
03-16-2015, 10:37 PM
Gold and Silver Outlook for March 16-20


Silver and gold followed major currencies such as the Euro and Japanese yen and declined again as the USD continued to pick up. This week’s FOMC meeting could bring gold and silver to a new year low if the FOMC were to take another hawkish tone and set the stage for a rate hike in the coming months. The FOMC will also release an updated economic outlook and a press conference will follow the FOMC statement. Other U.S. reports and events include: industrial production, housing starts, and Philly Fed index. In Europe we have: Targeted LTRO, ECB President Draghi speaks, EU Summit, BOE and SNB rate decisions, and EU CPI. Here is a preview for March 16th to 20th, 2015:


The upcoming FOMC meeting is likely to delve into the progress of the U.S. economy and could move again the prices of gold and silver. The main issue will be the wording of the statement and whether the term patience will be omitted. In such a case, this is likely to put a bit more upward pressure on long term yields – as the odds of a rate hike will slightly increase.

http://pcm-fx.com/pcmupload/uploads/1426530916471.jpg


The table above shows the reaction of gold and silver following the past FOMC meetings decisions. As you can see, in four of the past five meetings the market reaction of gold and silver was mostly negative. Nonetheless, the current implied probabilities, have slightly declined to 40% chance of a rate hike in July and 58% of a rate gain in September. These numbers are modestly lower than the probabilities recoded in the previous week but are still higher than last month’s.


The FOMC will hold a press conference and provide an update to its economic outlook. Regarding the outlook it will be worth noticing the FOMC members’ updated expectations about GDP growth rate, inflation, and employment. The low oil prices and deflation pressures from other countries including Euro Area could reduce further the FOMC’s inflation guidance. This could also result in a change in the cash rate outlook for this year.


The recent rise in the U.S. dollar and expanding monetary policy of ECB, BOC and RBA could also be a factor that will be considered in the this meeting.


In Yellen’s last testimony, she addressed the weakness of China and the potential adverse impact it could have on the U.S. economy. She also talked about falling oil prices and its positive impact on the U.S. economy. Yellen also said that a rate hike isn’t likely to occur in the upcoming couple of meetings. A rate hike will be considered a “meeting by meeting basis”.


Besides this event, other U.S. reports that will be released this week include Philly fed index and housing starts. These reports, however, are likely to have little impact on bullion prices – unless they show a significant and unexpected change from current estimates.


In Europe, the next TLTRO will be auctioned to commercial banks. In the past two installments, the targeted LTRO didn’t reach the market expectations. This is another factor that could impact the size of ECB’s QE program – more targeted LTRO could result in less QE. Other reports to consider are German economic sentiment, trade balance, and EU CPI. If the Euro keeps falling against the USD, this could also drag down bullion prices.


By the end of the previous week, gold holdings in the GLD ETF fell again by 1% to 750.67; despite the recent decline in its gold holdings, its holdings remain up by 5.4% for 2015, up to date.


What’s up ahead?


One thing is very likely – the market volatility is expected to pick up again. The FOMC meeting could be a big event for gold and silver only if the FOMC were to change the wording and provide some new and updated guidance about the progress of the U.S. economy and next move about the rate hike. If the FOMC statement were to show a more hawkish tone and the outlook were to be more optimistic; then gold and silver could another beating. If the tone were to be more balanced or even dovish, then this could bring back up bullion prices. My guess is that the FOMC will take another step towards raising rates and set the stage for this scenario – i.e. gold and silver will have another harsh week. In any case, the high volatility is likely to remain put.

Samirofi
03-30-2015, 09:52 AM
Gold and Silver Outlook for March 30- April 3


Even though the oil market has experienced high volatility, this hasn’t translated to sharp movement in precious metals prices. The U.S. GDP report came slightly short and Yellen’s testimony didn’t offer any big headlines, which left the bullion market to maintain its course following the last FOMC meeting. This week the main reports include: U.S. NF payroll, EU flash CPI, GB, U.S. and China’s manufacturing PMI, U.S. PCE, factory orders, pending home sales, German retail sales and U.S. Consumer confidence. Here is a preview for March 30th to April 3rd, 2015:

The aftermath of the last FOMC meeting kept echoing in the bullion market as the prices of gold and silver continued to slowly rally. This dovish statement cut down the market’s expectations for a rate hike: The implied probabilities have dropped to a 19% chance of a rate gain in July and 38% of a rate hike in September.

Also, the U.S. GDP for the fourth quarter slightly missed market estimates as the growth rate was 2.2% — the expectations were for a 2.4% gain.

Finally, the U.S. dollar changed course and depreciated against leading currency pairs including the Euro, Yen and Aussie dollar. These developments may have contributed to the modest recovery of gold and silver. This could all change this week, however, if the upcoming U.S. NF payroll beats yet again the market estimates.

In the past employment report, the number of jobs grew by 295K –above market projections; the U.S unemployment rate slipped again to 5.5%.

http://pcm-fx.com/pcmupload/uploads/1427694665461.jpg (http://pcm-fx.com/pcmupload/)

This report will be released on Friday, when most markets mainly in Europe are closed. This could result in higher volatility if the NF payroll report shows a major deviation from market expectations. The current estimates are for a gain of 251K in jobs.

As you can see in the table below, when the NFP comes above market estimates, precious metals prices tend to come down.

Thus, if we were to see another gain of well above 251K, this could lead to another fall in gold and silver prices – as was the case in the past couple of times.

Other notable U.S. reports that will be released this week include: consumer sentiment, manufacturing PMI, core PCE, factory orders, and pending home sales. For the PCE, this is another indication for the progress of the U.S. inflation and is monitored by the FOMC.


By the end of the previous week, gold holdings in the GLD ETF fell again by 0.96% to 737.2; even though the ETF’s gold holding have dropped in recent weeks, they are still up by 3.5% for the year, up to date.

So what’s the bottom line?

The modest recovery of gold and silver – if one could call it that – may not last long and is mostly driven by falling U.S. dollar, higher tensions in the Middle East – higher risk tends to help bullion – and falling interest rates. These conditions could keep gold and silver up and even see additional gains, but this week these gains could change course if the NFP comes up higher than anticipated. So the high volatility could reappear at the end of the week.

Samirofi
04-06-2015, 10:50 PM
Gold and Silver Outlook for April 6-10
The recent NFP report came short of market expectations with only 126K jobs added in the past month. This report is likely to rekindle the hopes of a “later rather than sooner” rate hike by the FOMC – perhaps by the end of the year/next year. In the meantime, gold and silver investors are likely to benefit from this news as it could bring back up these metals’ prices. This week the main reports include: Minutes of the FOMC meeting, non-manufacturing PMI, JOLTS monthly update, RBA rate decision, EU retail sales, and China’s CPI. Here is a preview for April 6th to 10th, 2015:


The NFP report showed a gain of 126K after the job market grew by over 200K each month in the past half year. Some analysts suggested it’s due to harsh weather conditions and also the adverse impact of the low energy prices. This week, the JOLTS report will be released and will provide another indictor for the progress of the U.S. labor market. It’s more important to consider that if the coming reports show fewer job gains than in recent months, this could imply a change in trend. The slower the U.S.

economy progress, the prices of gold and silver are likely to benefit via the FOMC’s policy – turning more dovish may help bring slightly up bullion prices. According the CME, the implied probabilities have fallen again to a 14% chance of a rate hike in July and 28% of a rate hike in September.


During last week, the U.S. dollar appreciated against leading currencies such as the Euro, Yen and Aussie dollar. If the U.S. dollar were to change direction again and fall; this could also pressure back up the prices of gold and silver.


This week the main report to be released is the minutes of the FOMC meeting from back in March. In the last meeting, the FOMC took down the patience term but had a dovish tone. Moreover, the dot plots show that the FOMC members project the rate at the end of 2015 will be lower than previously estimated. If this report shows FOMC members are less incline to raise rates anytime soon, this could bring back up gold and silver.


Other reports that will be published this week include: U.S. non-manufacturing PMI, China’s CPI, EU retail sales and Canada’s employment report.



By the end of last week, gold holdings in the GLD ETF remained unchanged at 737.2; even though the ETF’s gold holding have dropped in recent weeks, they are still up by 3.5% for the year, up to date.

What’s next?


Gold and silver are likely to start the week strong following the release of the NFP report. Finally, if the minutes of the FOMC meeting show another dovish tone as members become less incline to raise rate in the coming months; this could also bring back up gold and silver during the week.

Samirofi
04-14-2015, 08:32 PM
Gold and Silver Outlook for April 13-17


Gold and silver started off last week strong only to come back down in the following days. The minutes of the FOMC took the back seat to the aftermath of the disappointing NFP report. The progress of the USD is likely to determine the direction of gold and silver. This week the main reports include: ECB’s rate decision, U.S. CPI, China’s GDP for Q1, BOC rate decision, Australia’s employment report, U.S. housing starts, U.S. consumer sentiment, China’s industrial production, and Philly Fed index. Here is a preview for April 13th to 17th, 2015:

The market’s reaction of gold and silver rising came at the beginning of the week after the non-farm payroll report showed on Friday a mere increase of 126K during March – well below market expectations and below the rate recorded in the past year. This news, however, didn’t keep gold and silver prices up for long as both metals changed course and came back down in the following days. The recent recovery of the USD compared to the Euro, yen and Canadian dollar may have curbed down the rally of precious metals.

Also, the minutes of the FOMC meeting were preserved, depends who you ask, as dovish – as such it balanced the hawkish statement that was released last month. This news didn’t seem to move markets including gold and silver.
This week, the ECB will announce of any changes to its monetary policy. Even though, ECB isn’t expected to make any big changes, it’s still an even that could move the Euro. ECB’s QE program has commenced and Draghi could provide some additional information about the future progress of this program.

Some reports to be released in the U.S. this week include: CPI, retail sales, Philly fed and consumer sentiment. These reports will provide additional insight about the progress of the U.S. economy. If the U.S. economy shows a slower progress, this could turn back down the USD, which could also benefit precious metals. After all, this could also reduce the probability of the FOMC raising rates in the coming months and turning a bit more dovish.

Following the recent developments, the implied probabilities of a rate hike have slightly increased to 17% for July and 34% for September, based on the calculation of the CME.

Other reports that will be published this week include: China’s GDP and industrial production. China is among the leading economies in consuming gold. If China’s economy progresses at a slower pace, this could suggest the demand for physical gold may soften.

By the end of last week, gold holdings in the GLD ETF declined to 734.29 – a 0.4% slip compared to the previous week; even though the ETF’s gold holding have dropped in the past few months, they are still up by 3.1% for the year, up to date.

What’s up ahead?

The progress of the USD is likely to lead the way for gold and silver. The recent recovery of U.S. dollar against the Euro and yen could keep pressuring down precious metals. If the U.S. economic reports including retail sales and CPI fail short of market expectations, this could bring back up precious metals.

Samirofi
04-20-2015, 05:04 PM
Gold and Silver Outlook for April 20-24
The bullion market cooled down in the past several days as both gold and silver slightly declined last week. ECB’s rate decision didn’t provide any major headlines, albeit the Euro resumed its rally. The ongoing fall in LT treasuries yields and weakness in USD weren’t enough to bring back up gold and silver prices. But if these trends persist, they could, keep up gold and silver. This week: China’s manufacturing PMI (HSBC), U.S. core durable goods, Euro group meetings, EU manufacturing PMI, BOE rate decision, German economic sentiment, and jobless claims. Here is a preview for April 20th to 24th, 2015:


Following last week’s ECB policy meeting, in which there were no big headlines as ECB President Draghi kept the policy unchanged. He did refer to the progress of the QE program, but didn’t offer any news about the ECB policy.


In the U.S. the main report will be the core durable goods that could offer additional information about the progress of the U.S. economy. In China, the manufacturing PMI report by HSBC will be released. China took the center stage in the past couple of days after POC lowered again its RRR to 18.5%. If China keeps making changes to reheat the economy again, this could play in favor for silver and gold prices.


Long term treasuries yields kept coming down: As of the end of last week, 10 year yields reached 1.87% — this represents a 0.3 percentage points decline since the beginning of the year, up to date.


Based on recent changes in the bonds market, the implied probabilities of a rate hike have decreased to 10% for July and 27% for September, based on CME’s calculations.


By the end of the previous week, gold holdings in the GLD ETF bounced back to 739.065 – a 0.65% gain compared to last week; The ETF’s gold holding are up by 3.8% for the year, up to date.


Another slow week ahead?


Last week didn’t entail too many thrills for bullion investors and this week isn’t likely to be much different. Even though the U.S. dollar fell again, precious metals didn’t perform well and remained weak. Also, long term treasuries yields kept coming down, albeit this trend coincided with the soft bullion market. In the last week of April, however, the volatility in the bullion market could pick up again as the FOMC meeting and GDP report for U.S. will take the center stage. Until then, we could see another week of relatively smooth sailing for gold and silver.

Samirofi
04-28-2015, 08:19 PM
Gold and Silver Outlook for April 27-May 1
The weakness in the U.S. dollar didn’t gold and silver that kept coming down, as they have reached their lowest level this month. Will gold and silver change course again this week? The FOMC could shake things up for bullion investors especially if the FOMC turns a bit more dovish again. Besides the FOMC’s statement the first estimate of the U.S. GDP for the first quarter will come out this week and could also move the bullion market. Besides these two main evens of the week, other reports and events to consider include: GB first quarter GDP, U.S. and GB manufacturing PMI, U flash CPI, EU Monetary developments report, U.S. core PCE, UoM consumer sentiment, China’s manufacturing PMI, BOJ’s monetary policy meeting and BOJ’s economic outlook. Here is an outlook for April 27th to May 1st, 2015:


Even though the U.S. dollar took another hit against the Euro, Yen and Aussie dollar, gold and silver took another dive during last week. This could all change, however, if the FOMC continues with its recent line of dovish remarks. A reminder: In the previous statement the sentiment was leaning towards the doves, albeit the minutes of the meeting came across a bit more hawkish – by doing so it balanced out the statement.

http://pcm-fx.com/pcmupload/uploads/1430237873942.jpg (http://pcm-fx.com/pcmupload/)


Source of data: Bloomberg and FOMC’s website


This time, however, there is no press conference or update to economic outlook so the market isn’t likely to react to this news item as it did last time. The wording of the statement will matter and all eyes will on the FOMC’s release on Wednesday to see if there is any change to policy or any change in the wording of the statement. Currently, the markets project no chance of a rate hike this time. Are they still planning to raise rates this year? Last time, the FOMC revised down the projections for the cash rate’s level by the end of the year.


Besides the FOMC statement, the GDP report for Q1 – first estimate – will also come out on Wednesday. The current estimates are for 1% gain in the last quarter. If the report comes short of these current estimates, the FOMC could take a stronger dovish tone and it could signal that the low rates will remain for a longer time. In such an event, it could put a bit more wind into precious metals’ sails, even if for a short time.


Other reports worth noticing this week include: U.S. PCE and core PCE, EU CPI, U.S. pending home sales, and U.S. manufacturing PMI. These reports could move the U.S. dollar and Euro and, in turn, push gold and silver prices.


Even though long term treasuries yields rallied in recent weeks, they are still slightly down for the month of April: 10 year yields reached 1.93% — they are only 0.01 percentage points below their levels recorded at the beginning of the month. Moreover, 20 and 30 years treasuries yields are actually up for the month. Based on recent developments in the bonds market, the implied probabilities of a rate hike have slipped to 9% for July and 26% for September, based on CME’s estimates.


By the end of last week, gold holdings in the GLD ETF rose again to 742.347 – a 0.44% gain compared to last week; The ETF’s gold holding are up by 4.22% for the year, up to date.


Will gold and silver recover?

The bullion market hasn’t done well in the past several; this could change in the coming days — mainly if the U.S. economy doesn’t show signs of progress, and if the FOMC releases another dovish statement. The recent weakness of the U.S. dollar didn’t help gold and silver and for now very long term treasuries yields (20-30 years) are still up for the month, which could be enough to drive down gold and silver. But if the FOMC hints that a rate hike could occur later rather than sooner, this could be enough to drive back up, even for a short period of time, precious metals prices.

Samirofi
05-04-2015, 10:13 AM
Gold and Silver Outlook for May 4-8

Despite the drop in precious metals prices by the end of the week, gold remained nearly flat and silver was up by 3% on a weekly scale. The recent FOMC meeting seems to have brought down gold and silver, after they started off the week on a strong note. The USD also moved in different directions among leading currencies: The USD fell against the Euro but bounced back against the yen. LT treasury yields picked up again as the markets estimate there is a higher chances of a rate hike in the coming months. What is next for gold and silver? The main event of the week in the U.S. is the upcoming NF payroll report. Other reports and events to consider include: RBA’s rate decision, UK elections, Yellen’s speech, U.S. trade balance, EU retail sales, U.S. factory orders, German manufacturing PMI, U.S. non-manufacturing PMI, China, manufacturing PMI. Here is an outlook for May 4-8, 2015:

The FOMC concluded its meeting with little more to say – it was the shortest statement in the past few years. This time, the FOMC removed forward guidance from the statement, as expected, and kept a cautionary optimistic tone. Albeit the modest growth in GDP in the first quarter and lower than expected NF payroll, the FOMC left the door open for a rate hike in the coming months.

http://pcm-fx.com/pcmupload/uploads/1430719921081.jpg (http://pcm-fx.com/pcmupload/)


Following this news about the FOMC statement, the market estimates, as derived from the implied probabilities in the bonds market, put the odds of a rate hike in September at 30% and 65% in December – this is a bit higher than before the FOMC meeting ended.

The upcoming NF payroll report could stir up these odds again, especially if the report shows a higher than expected growth in number of jobs. Last time, the number of jobs added was only 126K – lower than market estimates. In the upcoming report, however, the market projects a 231K gain in jobs. If the report does show a high level of job gain and even an upward revision of the past couple of months, these factors could bring further down gold and silver prices by the end of the week.

Other notable events and reports include: Yellen’s speech in a panel discussion about finance, governance, and society at the Institute for Economic Thinking conference on Finance and Society, in Washington DC; UK elections – while the elections won’t have a direct link to precious metals, the results could still stir up the forex markets; RBA rate decision – currently it’s estimated that the RBA will slash again its rate by 0.25 pp to bring it to 2%; this could devalue the Aussie dollar and have a modest adverse impact on gold and silver.

By the end of the previous week, gold holdings in the GLD ETF slipped to 741.75 – a 0.08% fall compared to last week; The ETF’s gold holding are up by 4.13% for the year, up to date.

Final word

The roller-coaster of gold and silver prices in the past week could continue in the coming weeks. The progress of U.S. dollar and long term treasury yields will also impact the direction of precious metals. If yields keep rising, this could play against gold and silver. The USD rallied again the yen but fell against other currencies including Euro and Aussie dollar; if the USD keeps devaluating against leading currencies this could actually, down the line, play in favor for gold and silver. For now, it seems that the NFP report will come out strong and show a higher gain last month. In such an event, gold and silver, on a weekly scale, could keep coming down.

Samirofi
05-11-2015, 12:15 PM
Gold and Silver Outlook for May 11-15
The U.S. jobs report showed a gain of 223K jobs, which wasn’t far off market expectations, albeit it was better than the previous report. Alas, the report also showed downward revisions for the previous jobs reports and little change in wages. Following this news, gold and silver slightly rose, while the USD experienced sell offs mostly against the Euro and Aussie dollar. This report is likely to keep resonating in the precious metals markets in the coming days. Looking forward, the main U.S. reports will revolve around consumer: retail sales and consumer sentiment. The JOTLS report will complete the labor market overview and PPI monthly update will come out. In Europe, the GDP for Q1 will be released and could move markets. Here is an outlook for May 11-15, 2015:


The NFP report was better than in the last report but didn’t come far off market expectations, and as you can see, the deviation from market estimates tend to move the gold and silver needle.

http://pcm-fx.com/pcmupload/uploads/1431332080351.jpg (http://pcm-fx.com/pcmupload/)


The correlation among gold, silver and the deviations of NFP numbers from market expectations remain strong, as the table above presents. This could suggest that if the labor market doesn’t grow any faster in the coming months, this could give a second wind for a short term rally in precious metals prices.


For now, the news of the slower growth in the U.S. — the disappointing GDP for Q1 and now the NFP, which wasn’t weak but still wasn’t too impressive – has also driven down the market estimates about the next rate hike by the FOMC: The implied probabilities in the bonds market, shows that the odds of a rate hike in September have fallen to 23% and 54% in December. So even if the FOMC does pull the rate hike trigger, how much high could the cash rate be by the end of the year?! Will it be enough to drag down gold and silver to a new low?


Following the NF payroll report, this week the JOLTS report will be published, which is another report highly monitored by the FOMC, about the labor market. This report, however, tends to have a weaker impact on the bullion market.


Besides this monthly update, the main focus in the U.S. will be around the consumer with consumer sentiment and retail sales reports.


Last week another event that stirred up the markets was FOMC Chair Yellen’s comment about the high value of stocks. This comment isn’t likely to have a long term impact on the markets.


Finally, RBA, as expected, cut its cash rate again by 0.25 pp to 2%. This decision was expected and didn’t seem to have a strong impact on the forex and commodities markets.


By the end of last week, gold holdings in the GLD ETF fell again to 728.325 – a 1.81% drop compared to last week; The ETF’s gold holding are up by 2.25% for the year, up to date.


Takeaway

The recent devalue of the USD against leading currencies and the fall in the implied probabilities of a rate hike in the coming months pressured up gold and silver. This recovery, however, may not last long if the USD starts to come back. For now, the weakness of the USD could continue. Also, the NFP report is likely to echo in the coming days and keep gold and silver from pulling down. The ongoing fall in the gold and silver holdings in leading ETFs may suggest the demand for bullion is diminishing, which doesn’t vote well for precious metals outlook. Despite the lower odds of a rate hike in the coming months, LT bond yields rose in recent weeks, which could drive down gold and silver. These moving parts pull gold and silver in different direction, and all this suggests gold and silver may remain at their current levels. But I remain bearish on gold and silver for the long run.

Samirofi
05-18-2015, 02:58 PM
Gold and Silver Outlook for May 18 -22
The change in direction of U.S. LT treasury yields along with the devaluation of the USD have pressured back up gold and silver. Is this turn of events suggests bullion prices are on their road to recovery? The minutes of the FOMC meeting, U.S. CPI for April will be the main events of the week. Other reports and events to consider include: RBA’s minutes of last meeting, Japan’s GDP for Q1, China’s manufacturing PMI, U.S. housing starts, Draghi’s speech, EU CPI, and Philly Fed survey. Here is an outlook for May 18-22, 2015:


The recent rally of gold and silver was mostly driven by the weakness of the U.S. dollar, the stagnation of the U.S. stock market and the sudden drop in long term treasury yields. The chart below presents the developments in the price of gold and 10-year treasury yield over the last few months. As you can see, the relation between the two data series is strong and negative, and suggests the two are related.

http://pcm-fx.com/pcmupload/uploads/1431946590041.jpg (http://pcm-fx.com/pcmupload/)


This means if the relation keeps holding up, then the ongoing progress in the LT treasury market could still play an important role in the direction of gold and silver.


The upcoming minutes of the FOMC meeting could stir up the bullion market again. Especially since the FOMC keeps a tight lid and no clear outlook about the timing of its next rate hike. The recent NFP report was better than in the previous month but still wasn’t too impressive, the GDP for Q1 didn’t show a strong growth, the U.S. inflation is still very low, and the stock market could start to be showing signs of slowdown – which also doesn’t create a good timing of raising rates. All these factors are likely to be considered by FOMC members, albeit the Fed’s two mandates – inflation and labor – are the ones that really matter of the final call about raising rates.


With forward guidance removed from the last statement all eyes will be on the minutes that could shed some light on the Fed’s next move. The market is still undecided on whether the FOMC will actually raise rates this year. The implied probabilities of a rate hike, based on the pricing of U.S. bonds, are now only 18% for a September hike and 51% for December – these figures are lower than last week.


Since the minutes could create, as they did in the past, more uncertainty than clarity, we could see high volatility in the gold and silver market. This also means both precious metals could go in either direction in the coming weeks.


Besides the release of the minutes the U.S. CPI for last month will also come out and show if there is any rise in inflation. Considering the price of oil picked up last month, we could see a rise in the CPI, but this doesn’t mean the core CPI increased as well. As of last month, the core CPI was still low at only 1.8%, which was below the FOMC’s 2% target. Any rise in core CPI could be a positive indicator for gold and silver. For now, inflation is still low and as such isn’t likely to move much bullion prices.


By the end of the previous week, gold holdings in the GLD ETF slipped by 0.6% to 723.911; The ETF’s gold holding are up by only 1.6% for the year, year-to-date.


Final note

The ongoing weakness in the U.S. dollar accompanied by drop in LT treasury yields provided the backwind for the rise in gold and silver. All this could change, however, if the minutes of the FOMC meeting are perceived as more hawkish so that the Fed could start considering a rate hike in the coming meetings. Conversely, the depreciation of the USD is still keeping up gold and silver and could keep doing so. In any case the volatility in the bullion market could continue until the market gets a better grasp about the FOMC’s next move. I still think the market undervalues the Fed’s determination in raising rates this year, and, if this is the case, thus once it will become clearer, gold and silver could take a hit from this development. This scenario, however, could take a while until it sets in motion. Until then, bullion investors could still see short term gains of gold and silver but nothing to warrant a sustainable recovery for either of the precious metals.

Samirofi
05-25-2015, 04:44 PM
Gold and Silver Outlook for May 25-29
The FOMC released the minutes of the last meeting. The news about the minutes was enough to pull up the U.S. dollar against leading currencies and drag along the way gold and silver. The odds of the FOMC raising rates in the coming meeting this year rose last week, which also put additional pressure up gold and silver prices. This week, the main report to be in the lookout is the U.S. GDP for Q1, second estimate. Other reports and events include: U.S. pending and new home sales, EU monetary development, U.S. durable goods, German consumer climate, unemployment claims, and U.S. consumer confidence. Here is an outlook for May 25-29, 2015:


The minutes were mostly optimistic as FOMC members blamed the poor data on transitory factors including weather conditions, labor dispute at West Coast ports, and residual seasonality effects – the latter could be responsible for showing slower growth in the first quarter of the past few years. In any case, this news was enough to bring back up LT yields, strengthen the U.S. dollar and drag down gold and silver.


Following the release of last week’s reports, the implied probabilities of a rate hike, based on the pricing of U.S. bonds, rose to 27% for a September and 62% for December – these figures are higher than last week. The zigzag in these numbers on, nearly, a week by week basis only illustrates the uncertainty around the Fed’s next move. This is likely to keep the volatility in the bullion market high.


This week the GDP for Q1 will be released – this is the second estimate. In the first estimate Q1 grew by 0.2%. The current estimates are for a -0.9% — a contraction. A decline in GDP could be enough to bring down USD and pull back up gold and silver. In the U.S. other notable reports to come out this week include: new and pending home sales, and durable goods. More positive news about the US economy could drive further up the USD.


By the end of last week, gold holdings in the GLD ETF dropped again by 1.2% to 715.26; The ETF’s gold holding are up by only 0.4% for 2015, year-to-date.

Takeaway


After a few weeks of weakness for the U.S. dollar, it bounced back in the past week. This gain, along with the rise again of long term treasury yields played in the background for the recent descent of precious metals prices. The minutes of the FOMC only showed FOMC members are still optimistic about the U.S. economy, which may have provided the push needed to drag back down gold and silver and raise the odds of possible rate hike in the coming months. But this week’s GDP for Q1 could change this sentiment — especially if the GDP shows a higher contraction in the first quarter than the market currently projects.

Samirofi
06-08-2015, 07:36 PM
Gold and Silver Outlook for June 8-12


The non-farm payroll brought further up the USD against leading currencies as it showed a rise of 280,000 jobs – higher than market estimates. This news is likely to resonate in the financial markets as it raises the odds of the FOMC taking a more hawkish stand in the next meeting on June 16-17. Besides the residual impact of the NFP, this week we also have: U.S. retail sales, JOLTS, consumer sentiment and PPI. In Europe, we have Great Britain manufacturing production and Germany’s industrial production. Finally, in Asia Japan’s GDP for Q1, China’s new loans and CPI will be released. Here is an outlook for June 8-12, 2015:


On Friday, the NFP report came out and was much better than expected. And since the deviation from market estimates tend to move precious metals, gold and silver, as you can see in the table below, came down on Friday.

http://pcm-fx.com/pcmupload/uploads/1433777642521.jpg


Moreover, the NFP also showed a total upward revision of 32K jobs for April and March. Rate of unemployment remained nearly flat at 5.5% and participation rate edged up to 62.9%.


Following the NFP report, the next jobs report that will be released this week is the JOLTS report that shows that changes in job openings. The current estimates are for the JOLTS to show a modest gain to 5.03 million in April. A gain in JOLTS could bring further up the USD and drag down gold and silver prices. This report is also followed by the FOMC and as such its members could consider the progress of the US labor market when they convene again this month for the next FOMC meeting. The implied probabilities in the bonds market, shows that the odds of a rate hike in September have risen to 31% and 67% in December. These figures could go even further up if the JOLTS show another gain.


Further, if the upcoming retail sales show a higher than expected growth, currently core sales are expected to rise by 0.7%, month over month, this could also bring further up the USD. The recovery of the USD and the bounce back in long term treasury yields are the right environment for gold and silver to see further losses in the near term.


Conversely, the recent trend could change course as the market is still on the fence of whether the FOMC were to raise rates this year. So keep in mind, it’s still far from a done deal, which means one thing – high volatility, including in gold and silver, is here to stay.


By the end of last week, gold holdings in the GLD ETF dropped by 1% to 708.7; The ETF’s gold holding are down by 0.5% for the year, year-to-date.


Bottom line

The ongoing rally of the U.S. dollar, the rise in interest rates are keep driving down the prices of gold and silver. If this trend persists, precious metals are likely to further fall – especially if the upcoming U.S. report including JOLTS and retail sales show better than expected results.

Samirofi
06-15-2015, 05:51 PM
Gold and Silver Outlook for June 15-19
The bullion market remained poised last week as gold slightly rose while silver modestly declined. But this could all change and precious metals may take another severe hit this week if the upcoming FOMC meeting were to set the stage for a rate hike in the coming months. Excluding a pessimistic sentiment in the statement and/or a harsh dovish tone in the press conference by Yellen, which, let’s face it, could happen – after all she is still a dove — we are likely see a rise in the U.S. dollar and fall in gold and silver prices. This is likely to occur even if the FOMC doesn’t report on any changes to its interest rates – in that scenario the USD will jump high and bullion prices are likely to tumble. Just setting the ground work for a rate hike in September/December could be enough to do the trick. Besides this major event, other events to consider this week in the U.S. include: Housing starts, CPI, and Philly Fed index. In Europe, ECB President Draghi will testify, GB and EU CPI and Great Britain Claimant Count Change. Finally, in Canada, we have manufacturing sales, retail sales, and CPI. Here is a preview (http://www.tradingnrg.com/weekly-forecast-of-financial-market-june-15-19-2015/) for June 15-19, 2015:


The upcoming meeting could increase the financial markets’ volatility considering this time the meeting includes a press conference, an update to the Fed’s outlook and the dot plot chart.

http://pcm-fx.com/pcmupload/uploads/1434376208291.jpg (http://pcm-fx.com/pcmupload/)


As you can see, in 8 out of the past 11 meetings in 2014-2015 followed with a drop in gold and silver prices. Every time, the market’s reaction is, in most cases, bearish for precious metals as the FOMC slowly moves towards raising rates.
This upcoming meeting, however, the market doesn’t expect to see a rate hike. Even though the jobs report was solid in the last NFP report and JOLTS report also showed a jump in job openings, the FOMC is likely to slightly revise down its outlook on the labor market – mainly due to the weak result in March.


The GDP forecast for 2015 is also likely to be revised down. But the tone of the statement is still expected to be upbeat with optimism about the progress of the US economy.

The FOMC is likely to keep a lid on the timing of the rate hike, but keeping an optimistic outlook – even with the modest downward revisions – could be enough to bring further down gold and silver.


As of the end of last week, the implied probabilities (http://www.cmegroup.com/trading/interest-rates/fed-funds-flash.html) in the bonds market, shows that the odds of a rate hike in September have stabilized at 30% and 68% in December. These figures could slightly rise again if the FOMC keeps an optimistic view about the US economy.


The silver lining for the bullion market could be if the FOMC revise down again the dot chart, which were revised down back in March 2015 and December 2014. Another downward revision could suggest that even if the FOMC plans to go along and raise rates this year, the pace could be slower than previously estimated. Such a revision could be enough to offset the optimism of the FOMC. After all, this was the case in March and December – bullion prices actually rallied following those meetings. Keep in mind that currently the median estimate for the Fed’s cash rate by the end of the year is at 0.625%; so another downward revision will basically cut down the possibility of a rate hike in September. This scenario, while still very plausible, for now, seems less likely.


By the end of last week, gold holdings in the GLD ETF declined again by 0.67% to 703.9; The ETF’s gold holding are down by 1.2% for the year, year-to-date.\

Bottom line


The FOMC is likely to move the prices of gold and silver in the inverse direction of USD. For now, it seems more likely to see another rally of the greenback and higher interest rates, which are likely to further drag down gold and silver. But we could also see a change in dot plot – a downward revision – which could, as in the past, bring back up gold and silver – even if for a short while.

Samirofi
06-23-2015, 10:34 AM
Gold and Silver Outlook for June 22-26
Precious metals got a modest boost following the dovish FOMC meeting statement, which also dragged down the implied probabilities of a rate hike in the coming months. Even though the Greek debt crisis keeps the door open of Greixt, which could have a significant impact on foreign exchange rates and financial markets in general, the main issue, for bullion, is likely to remain the U.S. monetary policy and Federal Reserve. For now, the Fed is still on course to raise rates this year, at least based on the current available data, so precious metals aren’t out of the woods just yet. If the economic data show the U.S. economy is progressing at a faster pace, this could raise the odds of possible lift off perhaps as soon as September. The economic data to consider this week include: update on GDP for Q1, core durable goods, new home sales, consumer sentiment, and core PCE. In Europe, all eyes are set towards the EU Summit and Euro Group meetings: The Greeks will have to get another bailout of 1.5 billion euros by the end of the month or else it will default on its debt to the IMF. This story will likely to crowd out other reports and events such as China’s flash manufacturing PMI, EU M3, and German business climate. Here is a preview for June 22-26, 2015:


Following the recent FOMC meeting, the bullion market’s reaction was mostly positive as the tone of the statement of press conference that followed was mostly dovish.

http://pcm-fx.com/pcmupload/uploads/1435041117061.jpg (http://pcm-fx.com/pcmupload/)


Even though the Fed’s decisions move the prices of gold and silver, the latter have remained relatively this year so far. The markets are still seeking for the direction of interest rates, which have gone up in the past year only to come back down. They have started to rise again, but it’s still too soon to call it in either way. As long as rates remain low, precious metals benefit from these low levels and don’t tumble.


As of the end of last week, the implied probabilities in the bonds market dropped so that the probability of a rate hike in September fell to 12% and only 50% in December. If the U.S. economy shows strong figures this week, the odds could climb back again.


The situation in Greece also plays a role in the progress of the Euro and level of volatility in the markets. If in the past, a possible Greixt was nearly impossible to consider, now it have become more plausible, albeit still unlikely, scenario. The gap between the Greeks and holders of Greek debt – mostly EU countries led by Germany – is still too wide on austerity measures including reducing pensions. But it still seems that in this Mexican Standoff the Germans have a bit more to lose than the Greeks from a possible Greixt. Although let’s not forget that according to recent polls, the Greeks still favor the strong Euro over a potential very weak drachma. So we are back to a Mexican Standoff…


For precious metals, the Euro rallied against the U.S. dollar, which actually benefits bullion prices. If the Euro keeps rising, which may occur as the odds of a Greixt rise, gold and silver, via the devaluation of the U.S. dollar, could further benefit from this development.


By the end of last week, gold holdings in the GLD ETF fell in seven of the last eight weeks. This time they declined by 0.30% to 701.9; The ETF’s gold holding are down by 1.5% for the year, year-to-date.


So where do we go from here?

The FOMC, as expected, didn’t offer too much more information than before and left us wanting hungry for more. Until we do receive a clearer guidance, the market will keep looking at the changes in the U.S. economy via the coming reports: The GDP for Q1, change in PCE and core durable goods. If we see better results than expected, this could raise again the odds of a rate hike in September, which could pressure back down gold and silver. The uncertainty around Greece could also play a role in moving precious metals via the changes in the U.S. dollar against the Euro. But the bottom line, we are likely to keep seeing high volatility with little movement from the current benchmark of $1,200 and $16 for gold and silver, respectively.

Samirofi
06-30-2015, 06:49 PM
Gold and Silver Outlook for June 29- July 3
After a slow movement of gold and silver prices throughout most of the month, their prices took a turn and fell last week on account of the strengthening of the US dollar against the Euro and Yen. The Greeks, much like the Americans next week, may “celebrate” their own independence from the Euro. Albeit I doubt many Greeks will consider it a celebration. So the Greek debt crisis will take again center stage and move the Euro, which could also have a ripple effect on other markets including precious metals. Besides the developments in Europe over the Greek debt crisis, in the U.S. the non-farm payroll report will also lead the news as it will come out on Thursday. Other reports that will be published in the U.S. include: Manufacturing PMI, consumer confidence, factory orders, and pending home sales. In Europe other news include: GB current account, ECB’s minutes of last meeting, EU and German retail sales, and EU flash CPI. In China the final estimate of the manufacturing PMI by HSBC will be released. Here is a preview for June 29- July 3, 2015:


The next Greek payment to the IMF is due by June 30th and for now the Greeks don’t have the funds needed to make this payment. The surprise referendum on the bailout plan set for July 5th wasn’t accepted well by EU officials, even though, for now, it seems the Greeks aren’t incline to leave the EU, based on latest polls. So the possibility of a default has increased along with a possible Grexit. This also means that if I once compared the current situation between the Greeks and the Germans as a Mexican standoff, the current course the Germans, along with other debt holders, seems to suggest they aren’t so fearful of a possible Greek default and then exit.


Besides the Greek drama, the other major event of the week for precious metals is the publication of the non-farm payroll report, which will released this time on Thursday. Currently, the market estimates the report will show a gain of 231,000 – lower than last month. If the report were to show a higher than expected gain in number of jobs, this could bring further down gold and silver prices. A stronger gain in the number of jobs could persuade a bit more the market of a possible rate hike in September, even though the Greek drama could also play a role in this decision.
http://pcm-fx.com/pcmupload/uploads/143567570271.jpg (http://pcm-fx.com/pcmupload/)


As you can see above, last time the higher than expected gain in number of jobs also coincided with a decline in gold and silver prices.


As of the end of the previous week, the implied probabilities in the bonds market slightly rose: The probability of a rate hike in September increased to 16%; the odds of rate hike in December also rallied to 57%. If the U.S. economy shows another gain in the NFP report of over say 250K, this could bring further up the implied probabilities of a rate hike in the coming months. And a higher rate will likely drive down gold and silver prices.


By the end of last week, gold holdings in the GLD ETF changed course and rose by 1.30% to 711.4; The ETF’s gold holding are down by only 0.1% for the year, year-to-date.


What’s next?

As usual the whole issue of the progress of the U.S. economy and the monetary policy of the FOMC will lead the way for gold and silver. A strong NFP report could have a short term adverse impact on gold and silver prices seeing that they have a negative correlation. In the forex market the Greek drama will take the lead for the week and a higher chance of a Greek exit of the Euro could have a strong impact on the Euro/USD and consequently on bullion prices.

Samirofi
07-13-2015, 08:17 PM
Gold and Silver Outlook for July 13-17
The bullion market was also affected by the Greek debt drama as it shook up the financial markets. Despite the recent rise in volatility, the prices of both gold and silver only slightly decline on a weekly scale. Even the recent fall in China’s stock market, while rose the uncertainty around the progress of China’s economy has left much gold and silver prices low for long. The Greek saga will continue to lead the market news cycle – the latest news is that EU finance ministers are trying to find a solution to keep Greece in the EU, albeit a potential Grexit for 5 years is also considered.


Besides the Greek debt crisis, in the U.S. the CPI, consumer sentiment, Philly Fed survey, housing starts, PPI, and industrial production are the main reports that will be released this week. FOMC Chair Yellen will testify before Congress and Senate on the Fed’s monetary policy. In Europe, we have the ECB rate decision. The decision is less important relative to the press conference, in which Draghi is expected to be grilled about his stands on the Greek debt crisis. China’s GDP for Q2 will also be released this week and could shed some light about its economic progress.


As of the end of last week, the implied probabilities in the bonds market slightly picked up: The probability of a rate hike in September inched up to 14% and for December — 50%. They are still well below the levels recorded a few weeks ago.


The minutes of the last FOMC meeting and Yellen’s speech offered, yet again, another reiteration of the same message – rate hike is coming this year; it will be a data depended decision; it will a gradual raise. One possible scenario is for the FOMC to raise rates in September and then keep them unchanged for the remainder of the year. This will only have an impact on market expectations rather than the actual short term interest rates. So even in this scenario, the decision could have an adverse but not too strong impact on gold and silver prices. Yellen’s testimony is likely to present yet again no guidance about the next rate hike. In any case, any deviation from the normal script could be enough to shake the precious metals market.


By the end of last week, gold holdings in the GLD ETF declined again by 0.25% to 707.58; The ETF’s gold holding are down by only 0.66% for the year, year-to-date.


Final note

The recent fall in gold and silver isn’t enough to consider a downward trend – mainly since their respective prices are still in the same range they have been trading in for the couple of years. When it comes to Greece, it could play an indirect role on the FOMC’s policy by making it harder for the Fed to raise rates if Greece were to exit the EU – a move that could raise the economic uncertainty in the financial markets. In the meantime, if the U.S. economic reports were to show further progress they could slightly push up the odds of a rate hike, which won’t play in favor for gold and silver.

Samirofi
07-20-2015, 08:46 PM
Gold and Silver Outlook for July 20-24
The Greek drama continues, but for the financial markets the impact of the Greek debt crisis has weakened. Gold and silver prices took a sharp hit to the chin in the past week. Between the recovery of the USD and the weakness in China – bullion prices dropped. This week is likely to be less volatile and should suggest gold and silver prices won’t move from their current levels. The main reports that will be released this week include new and existing home sales in the U.S., EU manufacturing PMI, China’s new loans and Great Britain retail sales. The following week, however, could be much more turbulent with the U.S. GDP for Q1 and FOMC’s meeting.


Now that the Greek debt crisis is, for now, less in the news, market volatility could come back down. This could also mean the sharp movements in the forex and commodities markets may subside. The recent hit gold and silver took may have been, in part, driven by rally of the U.S. dollar. This week, however, we don’t have many important economic reports vis-à-vis the U.S. economy, so the U.S. dollar isn’t likely to do much this week. In the following week, however, the FOMC meeting and U.S. GDP for Q2 could stir up the bullion market again.


As of the end of last week, the implied probabilities in the bonds market slightly rose again: The probability of a rate hike in September slightly rose to 17% and for December — 57%.


By the end of the week, gold holdings in the GLD ETF dropped again by 2.25% to 696.25; The ETF’s gold holding are down by 1.6% for the year, year-to-date.

Final note The recent plunge in the gold and silver market may have been another reaction to the recovery of the USD. This week, however, gold and silver prices aren’t likely to do much. Until the next FOMC meeting, bullion prices aren’t expected to move from their current low levels.

Samirofi
08-04-2015, 10:16 AM
Gold and Silver Outlook for August 3-7
Never a dull moment for bullion investors in the past months: Last week, bullion prices bounced back, even though other major commodities mainly in the energy sector kept coming down. The rally came when the FOMC, wait for it, didn’t change the monetary policy – were you surprised as me? But the market considered this statement a bit more dovish and as such the expectations for a rate hike in September were revised down. This week, the main event of the week includes the non-farm payroll report that will be released on Friday. Other events and reports to consider are: U.S. core PCE, factory orders, manufacturing PMI, rate decisions of RBA, BOE and BOJ. For the complete review for this week’s agenda see here.


The Federal Reserve still seems to be on the fence on the timing of raising rates, at least based on the recent statement. The FOMC meeting concluded with no dissenters and the wording was little changed. The Fed showed a bit more optimism about the labor market, but inflation is still down and will remain so for a while. The decision to raise rates will be – again to surprise here – data depended.


This news, however, may have dragged down the odds of a rate hike as derived from the bonds market: As of last week, the implied probabilities of rate hike in September went down from 19% to 0%; for December the chances are still 55% — unchanged.


The GDP for Q2 was also released last week: The growth rate was 2.3%, year on year – slightly lower than market expectations.


Looking forward, the non-farm payroll report will be released and could move the bullion market: The current expectations are for a gain of 224K, which is close the growth in jobs back in June. Last time, the precious metal market didn’t react to the news as it wasn’t far off market estimates.

http://pcm-fx.com/pcmupload/uploads/1438668933871.jpg (http://pcm-fx.com/pcmupload/)


In the past, there is a strong negative correlation between the deviation of the actual from market expectations in number of jobs added and the percent changes in bullion prices on the day the NFP report is released. So if we were to see a lower-than-expected growth in jobs, this could push back up gold and silver prices. The last time there was a big miss that drove up bullion prices was back in April regarding the March report. For now, it doesn’t seem likely that we will see a sharp drop in jobs to below 200K.


Last week, the USD wasn’t much of factor in moving bullion prices. Because the USD remained nearly flat against major currencies.


By the end of the previous week, gold holdings in the GLD ETF fell again by 1.1% to 672.7; The ETF’s gold holding are down by 5.5% for the year, year-to-date.


What’s next?


The recent recovery in the bullion could be short lived. The market has adjusted to the lower possibility of a rate hike in September – let’s face it, it wasn’t so high to begin with. But if the upcoming NFP report doesn’t meet again market expectations, we could see another bounce in gold and silver prices. This scenario, however, isn’t likely and therefore it’s more plausible to see bullion prices resume their downward trend they have experienced in the past few months.

Samirofi
09-07-2015, 05:27 PM
Gold and Silver Outlook for September 7-11
Following the stronger than expected U.S. GDP report, the non-farm payroll came short of market expectations with 173,000 jobs – 47,000 jobs lower than anticipated. This news reduced but didn’t eliminate the chances of the Federal Reserve raising rates in September. Despite this news, during last week, the U.S. dollar slightly rallied against the Euro but devalued against the Japanese yen. This mixed trend for the U.S. dollar led to a modest drop in gold and silver in the past week. Nonetheless, the latest ECB policy meeting concluded with President Draghi beating down the Euro as he hinted of possible longer QE program. Will the weakness in the bullion market continue in the coming days? This week, the main reports that will be released include: PPI, JOLTS, and consumer sentiment. Bank of Canada and BOE will hold monetary policy meetings. China will release its CPI and trade balance monthly updates. Let’s breakdown the latest developments and what’s up ahead for precious metals.


The recent NFP report wasn’t too impressive and reduced market expectations regarding the Fed’s decision vis-à-vis liftoff — it lowered the implied probabilities for a September rate hike to 19%, for October the odds slipped to 36% and for December the chances fell to 53%. But the NFP was also not too bad as to take off the table a possible hike in the coming weeks. I remain skeptical about a September hike and think the Fed may push this decision to a later date.

http://pcm-fx.com/pcmupload/uploads/1441632377351.jpg (http://pcm-fx.com/pcmupload/)


Following the release of this report, the market is still likely to be impacted by it in the coming days as people try to figure out whether this report raises the chances of a rate hike and what’s does it mean regarding the progress of the U.S. economy.


This week, the JOLTS report and will be another indicator for the progress of the U.S. labor market. The FOMC follows this report and it could also impact their decision making. The upcoming report is expected to show 5.3 million number of job openings – a bit higher than in the previous months. It’s also important to examine the number of quits.


Other reports to look out for include: U.S. PPI, consumer sentiment and China’s CPI and trade balance. The progress of China is also an important factor for the bullion market – if China continues to show slower growth, it could also further pressure down gold and silver prices.


By the end of the previous week, gold holding of the GLD ETF remained nearly unchanged at 682.32 tons of gold. It’s still down for the year by 4.2%. The silver holdings of the leading silver ETF SLV fell by 0.8% to 323.39 million ounces.


Final note
The market remains confused. For now, gold and silver are down, and could keep coming down if the upcoming JOLTS report shows stronger than expected results. And the NFP could still echo in the market and push further down bullion prices as people may realize this report wasn’t too bad as the headline figure suggests. China is also another issue that could keep pressuring down bullion prices – if the trade balance report shows a lower than anticipated gain this could further bring down gold and silver. For now, I still think, unless we see much lower than expected results for the upcoming U.S. reports, gold and silver are still heading slowly down.

Samirofi
09-21-2015, 05:09 PM
Gold and Silver Outlook for September 21-25
The highly anticipated FOMC meeting concluded not with a bang – raising rates – but with whimper – keeping us guessing when the next rate hike will occur. In the statement and in Chair Yellen’s press conference it was clearly noted that a rate hike this year is still on the table. Moreover, three other Fed officials also voiced their opinion on Saturday for raising rates this year. As we progress closer to the end of the year, the pressure on the FOMC members to raise rates is likely to intensify, which could increase the possibility of rate hike this year. I still think, the Fed won’t raise rates this year as I pointed out in a recent article. In any case, as expected, precious metals prices rallied. And since the FOMC’s decision will keep echoing in the markets in the near term, bullion prices could still be affected by the recent decision.


This week, ECB President Draghi and FOMC Chair Yellen will give a speech. Other events on this week’s agenda include: U.S. GDP for Q2 (final estimate), the Greek elections results, U.S. durable goods, and China’s manufacturing PMI. Let’s review the latest developments related to gold and silver what’s next for the week of September 21-25:


The Fed’s decision to keep rates low and even voice their concern over the global economic climate was considered by many as a dovish statement. And from the perspective of gold and silver, we do see a market’s reaction similar to a dovish tone. But this assessment should have an asterisk: after all, in the foreign exchange rate markets, the U.S. dollar didn’t move much against leading currencies except for a short fall again Euro – the USD depreciated by 1.3% on the day of the statement’s release only to rally back 1.2% the next day.

http://pcm-fx.com/pcmupload/uploads/1442840860861.jpg (http://pcm-fx.com/pcmupload/)

For a more detailed explanation for the FOMC’s statement, see here (http://seekingalpha.com/article/3519956-3-takeaways-from-the-feds-september-17-rate-decision).



Following this decision the implied probabilities for a rate hike dropped for the next two meetings in October and December to 11% and 39%, respectively.

Looking forward, Yellen’s speech could move the bullion market – especially if she were to refer to what’s up ahead for the Fed. The title of her speech is: Inflation Dynamics and Monetary Policy.


In the coming days the markets are likely to keep digesting the recent FOMC decision and its interpretation in light of the new economic data. On notable report is the GDP for Q2, final estimate. In the previous estimate, the GDP growth rate was 3.7%, which was well above expectations. Another stronger than expected growth rate could further suggest the U.S. economy is improving and could increase the odds of the possible rate hike this year.


Another report to consider is China’s Caixin Flash Manufacturing PMI: after all, the Fed’s concern is mostly related to China. And for silver, the physical demand is mostly connected to the progress of China’s economy. Last time, the Caixin PMI remained low at 47.1; this time, the expectations are for the PMI to inch up to 47.6 – still means manufacturing sectors are contracting. If the PMI doesn’t start to pick up again to pass the 50 mark, it could suggest China’s economy isn’t doing well – this is a good sign for keeping Fed’s rates low, but a bad sign for the physical demand of silver; my guess is that a decline in the manufacturing PMI could have positive impact on gold and negative on silver.

Despite the recent rally in the prices of gold and silver, the demand for ETFs didn’t seem to pick up: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) fell to 678.2 tons of gold – 0.65% drop since the beginning of the month. And silver holdings for the silver ETF iShares Silver Trust (SLV) declined by 1.5% to 320.9 million ounces during September.

Samirofi
09-28-2015, 06:44 PM
Gold and Silver Outlook for September 28- October 2
The gold and silver market cooled down last week, as the U.S. dollar bounced back and started to appreciate against leading currencies such as the Euro British Pound and Yen. The U.S. GDP showed a growth of 3.9% — higher than expected. This report along with Yellen’s hawkish speech kept driving up the USD. And China’s disappointing manufacturing PMI didn’t help bullion’s market sentiment. Will gold and silver start to fall back down or resume its rally? The upcoming non-farm payroll will be main event that could move gold and silver.


Besides the non-farm payroll report, on this week’s agenda we have: EU flash CPI, U.S. factory orders, Canada’s GDP, U.S. consumer confidence, U.S. PCE, China and U.S. manufacturing PMI. Let’s breakdown the upcoming events and reports for the week of September 28- October 2:


The main report that came out last week was the final GDP estimate, and Yellen’s hawkish speech at the end of the week. But are these developments enough to change the market perception?


Following this news, the implied probabilities for a rate hike remained unchanged: for October 11% and for December 39%. This goes to show that despite the hype driven by analysts and pundits over Yellen’s speech and the GDP report, the market remains indifferent. Perhaps the market doesn’t buy the whole bait and switch routine of promising to raise rates and then not following through. For bullion investors, however, this is good news and kept, so far, gold and silver from resuming their downward trend.


Looking forward, we have the main event of the week – the non-farm payroll. Last time, the NFP came short of market estimates – only 173K compared to expectations of 220K. This week, the projections are at 202K jobs. The Fed will closely review not only the rise in jobs but also the changes in wages. Even though the jobs report tend to be negatively correlated with precious metals, in the last report, gold and silver still came down. Nonetheless, if the jobs report shows a gain of over 220K jobs gold and silver are likely to come down. And if it shows a lower growth – below 190K jobs, this could pull back up bullion. In the middle of the range, between 190K and 220K, it could keep prices in check.

http://pcm-fx.com/pcmupload/uploads/1443451335121.jpg (http://pcm-fx.com/pcmupload/)


It’s important to know that the reaction in the bullion market isn’t solely based on NFP jobs gains, but also unemployment rates, wages, participation rate, the reaction of the USD, and the change in market outlook about the Fed’s policy.


Other reports to consider are China’s Caixin final Manufacturing PMI and U.S. Manufacturing PMI. For China the flash report was very disappointing with a rate of 47. If the final estimate is sharply revised, this could raise the concerns over China’s progress, which isn’t good mainly for silver. The U.S. Manufacturing PMI is also expected to fall, this time to 50.8 – last month it stood at 51.1. A drop in the PMI will mean manufacturing sectors are still expanding albeit at a slower pace. This could move the USD, which, in turn, also impact the direction of gold and silver prices.


In terms of the changes it the demand for ETFs, there wasn’t a clear trend: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) rose to 684.1 tons of gold – 0.88% gain, week on week, while silver holdings for the silver ETF iShares Silver Trust (SLV) fell again by 0.8% to 318.2 million ounces. Both ETFs, however, are still down for the year. Despite the lack of growth in major ETFs, it’s worth mentioning that some countries such as Russia have been stocking up on gold, as presented in the chart below.

http://pcm-fx.com/pcmupload/uploads/144345133532.jpg (http://pcm-fx.com/pcmupload/)


Even China, which has started to provide updated data on its gold holdings have been accumulating gold. The rise in demand for gold in certain countries could be keeping up the price of gold from tumbling to new lows for this year.


Final note

The recovery of gold and silver came to a halt and especially after Yellen’s speech and the stronger than expected U.S. GDP report could further fuel the hype, especially among analysts, over a possible hike in December – in the bond market the rate hike outlook hasn’t changed. And if the non-farm payroll shows a gain of say over 250K jobs, this could push further up the USD and slightly increase the odds of a rate hike – two factors that don’t play in favor for precious metals. Nonetheless, the market is likely to remain skeptical about the Fed’s determination to raise rates this year after the dovish FOMC policy statement. I still think that for now, the movement in foreign exchange market will be the key issue in moving bullion. And in the short term, stronger U.S. reports will keep fueling the appreciation of the USD. So precious metals could change course and start their slow descent again.

Samirofi
10-06-2015, 09:42 AM
Gold and Silver Outlook for October 5-9
The week started off with sharp falls for gold and silver, but the latest NFP report turn things around for precious metals as they ended the week on a high note. But will this rally continue or will be short lived? The NFP presented a gain of only 142K in jobs – well below market expectations. Moreover, there were downward revisions for the two previous months of 59K. This week, we have three banks convene for their monetary policy meetings and the release of the minutes of the last FOMC meeting. These are some of the main events to look out for this week’s precious metals agenda.


The labor report wasn’t too impressive when you examine the jobs figures, which were lower than expected; this also means for the second consecutive month the U.S. experienced a jobs gain of less than 200K jobs per month. The lower than expected figures along with the downward revisions of previous months led to a jump in the prices of gold and silver. Despite the recent rally of gold and silver – gold was still down for the week and silver is slightly up by 1% during the week.

http://pcm-fx.com/pcmupload/uploads/1444109749531.jpg (http://pcm-fx.com/pcmupload/)


But the report wasn’t all bad, after all it did show a drop in the U6 (the “real unemployment”) – it fell to 10%. And the rate of unemployment remained low at 5.1%.


The latest report also shuffled the deck again when it comes to where the market stands on the rate hike of the Fed: The implied probabilities for a rate hike in October dropped to 5% and to 30% in December. For gold and silver, the lower the chance of a hike this year could help push up, even if for a short time, bullion prices.


The financial markets will keep digesting this report and what it means. In this respect, the upcoming FOMC minutes could also shed some light on the Fed’s take, given the current economic climate. Sometimes, the Fed revises the minutes up to the last moment. If so, the report could have a stronger impact on the markets.


Besides the FOMC minutes, three central banks will convene this week to discuss their monetary policy: RBA, BOJ and BOE. The market doesn’t expect any major moves from either of these banks, but the RBA and BOJ could still surprise and turn a bit more bearish on their respective currencies – a move that could boost the U.S. dollar against them. The BOJ is pressured to expand its QE program and RBA to cut rates – both are forced, in part, because of the ongoing weakness in China. A stronger U.S. dollar could adversely impact gold and silver prices. But considering the market doesn’t expect a rate hike by the Fed, we could keep seeing selloffs of the USD, which will likely to pull up bullion prices.


Following the recent bump up in bullion prices, the demand for gold ETFs slightly rose: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) increased to 689.2 tons of gold – 0.74% gain, week on week, while silver holdings for the silver ETF iShares Silver Trust (SLV) remained nearly unchanged at 318.4 million ounces.


Takeaway

The recent rally of precious metals may continue in the coming days especially if the Fed presents a dovish minutes and the economic data (e.g. non-manufacturing PMI) keep coming below expectations. Conversely, the central banks mainly RBA and BOJ could try to present dovish statement in order to pressure down their currencies, which could actually pressure down gold and silver prices. Nonetheless, as the market remains skeptical about the Fed’s determination to raise rates this year, it’s likely to keep gold and silver from resuming their descent over the short term.

Samirofi
10-12-2015, 02:53 PM
Gold and Silver Outlook for October 12-16


The gold and silver market, continued their rally from the previous week – following the weaker than expected NFP report. This time, the minutes of the FOMC didn’t offer any big headlines and updates about the Fed’s decision or the timing of the rate hike. The major central banks including BOJ, RBA and BOE didn’t revise their monetary policies – which may have contributed the deprecation of the USD against leading currencies. And as we have talked in our recent podcast – no news is bad news for the U.S. dollar, which, indirectly, also means good news for the precious metals market. This week, we have several updates from the U.S. including Philly Fed, retail sales, CPI, consumer sentiment, and JOLTS. In China there’s the CPI, PPI and trade balance reports. Any updates from China, mainly if they suggest a slowing down, could also indicate another drop in the probability of the Fed raising rates and an increase in the market anxiety levels – two trends that are likely to behoove gold and silver. But let’s take a closer look at the events of the week and the recent developments in the bullion market.


Last week, there weren’t major headlines to impact the market perception about the timing of the Fed’s decision to raise rates: The implied probabilities for a rate hike in October remained very low at 8%; for a December hike the odds slightly grew to 37%. And for March 2016, the chances are 59%. These low chances for this year are still keeping PM prices from falling to their yearly low levels.


This week, in the U.S. the retail sales, JOLTS and consumer sentiment reports will come out and will lead the way in moving the markets. Other notable reports include the Philly Fed index, U.S. CPI and PPI. If these reports were to adversely impact the progress of the U.S. dollar – lower than expected results may prompt selloffs of the USD – this trend could further pull up gold and silver prices. Moreover, the Philly Fed, retail sales and consumer sentiment are all indictors of economic growth – bear in mind in the past couple of quarters the U.S. grew at a higher than expected pace. The JOLTS and CPI are reports directly related to the two mandates of the FOMC: Inflation and labor market. Last month, core CPI was still low at 1.8%, while CPI at 0.2%. The Fed believes low oil prices have a transitory effect on inflation. But for now, the expectations remain low for inflation to be close to zero. Any gains in inflation could instigate a reaction in the markets for the Fed to reconsider raising rates sooner rather than later. As for the JOLTS, they will pertain for August. The last couple NFP reports weren’t impressive so a boost from the JOLTS – last time jobs opening reaches a new high of 5.75 million – could also help pull up the USD. Otherwise, we could keep seeing selloffs of USD and rise in bullion prices.


Despite the rally in gold and silver prices, the demand for gold ETFs slightly fell: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) dropped to 687.2 tons of gold – 0.3% fall, week on week; silver holdings for the silver ETF iShares Silver Trust (SLV) declined by 1% to 315.1 million ounces.


Takeaway

The delay – or perhaps we should go as far as saying indecision at this point — of the FOMC to raise rates, which was reaffirmed in the recent minutes of the last meeting, is providing a bit of boost to the gold and silver market. The upcoming reports including consumer sentiment, JOLTS and retail sales will provide additional insight regarding the progress of the U.S. economy. If they don’t meet expectations and fall short, they could provide additional backwind for gold and silver. The CPI will also show where the inflation in the U.S. is heading, which still, for now, seems low. In normal times, low inflation should have pushed down bullion prices, but this time, because it impedes its members from pushing the liftoff button, gold and silver markets may benefit from another delay in raising rates.

Samirofi
12-21-2015, 11:32 AM
Gold and Silver Outlook for December 21-25
The Fed finally raised its cash rate by 0.25 basis points to a range of 0.25-0.5%. The reaction in was quite subdue and perhaps even a bit underwhelming as market were prepared for this decision. The U.S. dollar still rallied during the week against major currencies including Euro and British Pound but only moderately rose against the Yen and Aussie dollar. Gold and silver actually bounced back on Wednesday after the Fed’s hawkish decision only to fall back down the next day. By the end of the week, the price of gold declined while silver rose. This week will be a much lighter one in the news department with the markets preparing for the Holiday season and continue to digest the Fed’s rate decision. Some U.S. news and events to consider include: GDP for Q3, core durable goods, core PCE, and new home sales.


The Fed decided, as expected, to raise its cash rate. Although the decision was advertised well in advance, it was still highly talked as indicated by the following Google trend chart:

http://pcm-fx.com/pcmupload/uploads/1450683075021.png (http://pcm-fx.com/pcmupload/)

And now people could focus on where the Fed’s cash rate is heading in 2016. But before we get ahead of ourselves let’s look how the market reacted to this recent hawkish news.

http://pcm-fx.com/pcmupload/uploads/1450683075212.jpg (http://pcm-fx.com/pcmupload/)

Source: Bloomberg, FOMC As you can see above, the market’s reaction this time was similar to the one it had back in October — when the FOMC left the door open to a December hike — with PM prices rising on the day of the release only to fall the next day. What’s up ahead for the Fed’s rate? After all, a higher Fed’s cash rate should push up LT rates, which should, in turn drive down PM prices. Based on the FOMC’s dot plot, the members still predict, as they did back in September, that the cash rate will reach 1.4% by the end of next year. This means four hikes of 0.25bp – nearly twice as many hikes as the market currently expects, based on the Fed-watch implied probability. Moreover, the market estimates the next hike may be in March as the odds of a 0.25bp hike is set at 52%; and 73% in June 2016. But I think the dot plot outlook should be taken with more than a pinch of salt

Source: FOMC Just consider what the FOMC estimated the cash rate will be by the end of 2015 – 1.125% or three times higher than what the current cash rate is actually at. For 2016 it was expected to reach 2.5% — nearly double the current estimates. Therefore, the dot plot seems to be overshooting and shouldn’t surprise people if the actual rate at the end of 2016 were to reach a much lower rate than 1.4%. And as long as interest rates remain low, or at very least don’t pick up too fast, the decline of gold and silver will mostly be moderate. It’s also worth noticing that this month, even though short interest rates rose this month so far – albeit not by much – long term interest rates, for 10/20/30 year have slightly declined. And lower long term interest rates could behoove bullion prices. This may partly explain why gold and silver are nearly flat for December, despite the hawkish Fed’s statement. Even the rally of the U.S. dollar during the month didn’t seem to drag down gold and silver prices. This week is likely to experience low volume of trading on account of the holidays; this tends, on occasion, to result in high volatility over short periods of times. But for the most part it’s likely to be smooth sailing with the market reflecting on the recent FOMC decision. The two major U.S. reports to consider include: GDP for Q3 and core PCE. If these report beat market estimates, this could further pull up the U.S. dollar, which may drag down gold and silver. By the end of previous week, gold holding of the gold ETF SPDR Gold Trust (GLD) bounced back for the first time in eight weeks by 2.25%, week on week, to 648.9 tons of gold. This could be another indication for the rise in demand for gold as investment in the past week following the Fed’s decision. Conversely, silver holdings for the silver ETF iShares Silver Trust (SLV) decreased by 0.4% to 322.08 million ounces.


Bottom line
So what’s happening? Let’s not forget that bullion prices declined during November and by close to 10% year-to-date. This could be a matter of rising global economic uncertainty that overshadows the modest and highly anticipated rate hike by the Fed. In any way, the weakness of precious metals is likely to continue as the Fed keeps turning hawkish and the U.S. dollar rises. But we are likely to see a very slow descent — as we saw back earlier this year — rather than a sharp fall as we did back in November.

Samirofi
12-28-2015, 09:33 PM
Gold and Silver Outlook for December 28-31
The last week of the year is upon us. And this week, much like last one (http://www.tradingnrg.com/u-s-gdp-little-changed-2-growth-in-q3/), will be a short one with low trading volume. This could result in lower volatility, albeit in the past volatility tended to pick up. Last week, gold and silver prices slightly bounced back following the rate hike by the FOMC (http://www.tradingnrg.com/the-fomc-awakens/). Precious metals’ bounce back coincided with the weakening of the USD against the Euro, Yen and Aussie dollar. Considering the short week, low trading volume and very few economic reports will be published, bullion prices aren’t likely to move much. Some of the reports that will be released this week include: U.S. consumer confidence, EU M3, U.S. pending home sales, Japan’s retail sales, and China’s manufacturing PMI.


This week will not only be a short one, but it will also be light on trading considering everyone is heading toward the holiday festivities. This will also likely to include gold and silver. These precious metals are likely to follow the lead – this week more than in the past – from the USD. If the U.S. dollar keeps its recent downward trend, this could also result in a modest recovery of gold and silver. It’s worth noting that it’s not clear cut that volatility will wind down on the last week of the year: Case in point, back at the end of 2014, the volatility in precious metals prices – as measured by the absolute average percent change in daily prices – was higher than during the first week of 2015. Conversely, at the end of 2013, volatility was lower than at the start of 2014.

http://pcm-fx.com/pcmupload/uploads/1451323819121.jpg (http://pcm-fx.com/pcmupload/)


Nonetheless, in both cases, gold and silver prices moved less on a weekly scale during the last week of the year than on the first week of the year. In other words, we could see a lot of movement but no real trend forming.


For now, the market hasn’t changed much its outlook about the chances of future rate hikes in 2016: According to Fed-watch the implied probability (http://www.cmegroup.com/trading/interest-rates/fed-funds-flash.html) for a hike may in March is 55%; and 76% in June 2016 – only modest gains from the end of the previous week.


Although gold and silver prices rallied last week, the same cannot be said of the demand for bullion ETFs: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) fell for the first by 0.6%, week on week, to 644.75 tons of gold. And silver holdings for the silver ETF iShares Silver Trust (SLV) decreased again by 1% to 318.8 million ounces – the lowest level this month.



Bottom line
Don’t expect much to happen this week in the financial markets. Precious metals prices could still see some modest gains, as they did last week, providing the USD will continue to slowly depreciate against the leading currencies – perhaps a correction to the buildup to the FOMC rate hike decision. While it was hawkish, people are still not too convinced the Fed will move forward in raising rates next year. And low rates along with global uncertainty equals gold and silver prices remaining put in the coming months.

Samirofi
01-04-2016, 05:33 PM
Gold and Silver Outlook for January 4-8
The gold and silver market didn’t have a good year with a 10% drop in prices. Will 2016 be any different? A lot will ride, yet again, on the Federal Reserve policy. And this week we have two reports that could shed some light on this matter including the minutes of the December FOMC meeting and the non-farm payroll report. These reports could move not only the U.S. dollar but also precious metals prices.


Let’s start with the NFP. Currently, the market expects a growth in jobs of 202,000 – around the same level recorded back in November.
http://pcm-fx.com/pcmupload/uploads/1451914042651.jpg (http://pcm-fx.com/pcmupload/)


These numbers aren’t too impressive but are also good enough to maintain the positive outtake of the U.S. labor market. Looking beyond the headline figures, it’s important to examine the progress of “real unemployment”, participation rate and – even more important – the growth rate in wages. If the growth in wages – last month it reached an annual rate of 2.3% — doesn’t pick up and even declines, this may call into question the Fed’s rate hike. If the growth rates remains close to 2.3% and perhaps rises to around 2.5%, this will reinforce the Fed’s current policy.

For gold and silver, the last report didn’t hold back their prices from rising, even though the U.S. dollar slightly appreciated against the Yen. Precious metals tended to be strongly negatively correlated with the surprise in the headline figure – although the last report shows that when the surprise factor isn’t substantial this relationship doesn’t always holdup.


So unless there is a significant deviation from the NFP headline figure, gold and silver prices are likely to rally: Over the last two years, the surprise – either higher or lower than expected – in the headline jobs growth came below 15K jobs (in absolute numbers) on eight occasions. Of these times, in six of them gold and silver prices rose. In other words, in 75% of the time the PM prices rose when the surprise was very modest – regardless of the direction of the surprise.


The big picture is how these numbers and progress of the labor market shape the Fed’s monetary policy. This brings us to the minutes of the FOMC meeting. The minutes could provide more information about the FOMC’s members’ deliberations. If the minutes reaffirms the hawkish sentiment among Fed members, this could further bring down gold and silver prices.


According to the recent update by Fed-watch, the implied probability for a hike may in March is 56% – nearly unchanged from the previous week; and 78% in June 2016. By the end of the year, the market estimates the Fed’s cash rate will come below 1% — or around 2 hikes of 25bp. This is still below FOMC members’ outlook of 4 hikes.


The recent fall in bullion prices also coincided with the decline in bullion ETFs holdings: By the end of the previous week, gold holding of the gold ETF SPDR Gold Trust (GLD) decreased by 0.4%, week on week, to 642.37 tons of gold. And silver holdings for the silver ETF iShares Silver Trust (SLV) also fell by 0.3% to 317.9 million ounces.


Takeaway

This week, gold and silver are likely to be driven by the direction of the Fed’s policy and the U.S. economy. If the labor market keeps showing strong growth – perhaps even well above market estimates – and the minutes of the FOMC reaffirm the direction of the Fed for 2016 – i.e. raising rates at a steady pace of 0.25 bp every other meeting – these reports are likely to push down gold and silver prices.

Samirofi
01-12-2016, 11:10 AM
Gold and Silver Outlook for January 11-15
The year started off with a lot of volatility mostly attributed to the selloffs of Chinese stocks. The growing concerns over what’s next for China pulled back up the demand for gold and silver. But then the NFP report came out on Friday –showing a gain of 292K in jobs, which was higher than expected – this brought back down gold and silver prices. Will this week entail additional gains for precious metals? Besides the NFP report and China’s woes that will keep resonating in the financial markets, among the main U.S. reports that will be release this week are: Retail sales, industrial production, PPI, consumer sentiment, and JOLTS. Let’s breakdown what’s next gold and silver for the week of January 11-15:


The recent NFP report was better than expected in terms of growth in jobs, but when it comes to wages – let’s just say it’s complicated. The annual growth in wages is around 2.5% — still in line with the past three months’ levels. But on a month-over-month basis, wages didn’t pick up. This doesn’t mean wages may not pick up again in the coming months, but it raises the question of whether we will see higher growth in wages moving forward.

http://pcm-fx.com/pcmupload/uploads/1452582543991.jpg (http://pcm-fx.com/pcmupload/)


After all, if the Fed subscribes to the whole idea behind long run vertical line Phillips curve and that the Non-Accelerating Inflation Rate of Unemployment or NAIRU, as explained by Larry Summers, is set at 5%. So any further stimulus when the natural rate of unemployment is at 5% — the current level – will only create higher inflation expectations without bringing down unemployment. Then this could suggest higher rates ahead – not a good sign for PM investors. The recent minutes of the FOMC didn’t offer much insight behind the last rate hike, but the Fed still seems convinced in raising rates several times in year. Summers, by the way, doesn’t believe that the right course of action only thinks that’s the model behind the Fed’s rate hike in December.


This week, the NFP report will continue to echoing in the markets and could keep driving down gold and silver prices, as it did back on Friday. The linear correlations between the surprise and bullion prices’ reactions are still strong and negative, which could shed some light behind the recent fall of PM prices.


Besides the NFP, the focus is likely to remain China and what’s next for the second largest economy. Anxiety in the markets and unrest in the Middle East over the dispute between Saudi Arabia and Iran are also developments that could push up the demand for gold and silver, which act as a long tail commodity in times of unrest in the markets. In the U.S. the main reports that will come out are retail sales, consumer sentiment, JOLTS, PPI and industrial production. The first two relate to consumer spending, the third addresses the progress of the labor market, the fourth is a proxy to inflation – albeit less important than PCE or CPI and the last one estimates production. If these reports show the U.S. continues to improve and the headline figures including retail sales and JOTLS reach or beat expectations, then they could pull back up the U.S. dollar and drive back down bullion prices.


ETFs and Fed’s future rate hikes


Based on the recent update by Fed-watch, the implied probability for a rate raise in March is down to 45%; and 66% in June 2016 – nearly 12pp lower than the previous week. By the end of the year, the market estimates the Fed’s cash rate will be, on average, 0.8% — this still implies a couple of hikes this year. If the U.S. labor market keeps showing progress, this could further raise this figure, which won’t behoove PM prices.


Following the high volatility in PM prices, ETFs holdings also shifted: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) rose by 1.1%, week on week, to 649.59 tons of gold. While silver holdings for the silver ETF iShares Silver Trust (SLV) declined again by 0.5% to 316.36 million ounces.


Final point
Gold and silver – much like other commodities – had a turbulent week, which isn’t likely to fade away in the near term. Considering the week is starting off light on the news, markets are likely to continue to digest the NFP report along with speculating what’s next for China. If concerns over China continue to mount, it could, even if for a short term, help pull up PM prices. But if the focus will shift back to the U.S. and assuming the upcoming reports – mostly JOLTS and retail sales – don’t disappoint, then expect gold and silver to come back down as the U.S. dollar recovers.

Samirofi
01-25-2016, 01:56 PM
Gold and Silver Outlook for January 25-29


Gold and silver prices slightly rose last week as the ECB promises more stimulus to follow, which could keep the U.S. dollar strong against the Euro. This week, the main event is the FOMC meeting that could impact the direction of gold and silver prices. The Fed is likely to refer to the recent market developments. Other main reports that will be released this week include: U.S. GDP for Q4 (first estimate), housing figures, consumer sentiment. So let’s breakdown what’s next for gold and silver for the week of January 25-29:

The ECB didn’t budge on its monetary policy, but the ECB President Draghi did promise more stimulus to follow in the coming months. He didn’t specify what kind of stimulus but we can assume it may include additional reductions to the deposit rate and augment the QE program. In any case, we could see the Euro continues to slide, which may, indirectly at least, keep pressuring down gold and silver prices – because if the USD appreciates against the majors, this doesn’t help commodities prices in general and precious metals in particular.

But let’s turn to the main event of the week: the FOMC meeting. This will be the first meeting for the year. The U.S. economy – at least the labor market – has shown signs of recovery. The concerns over China, weak retail sales, plunge in equities, additional fall of commodities are just some of the issues that the FOMC members will have to consider, even though these issues aren’t directly related to the Fed’s dual mandate. It’s still too early to determine whether the Fed’s recent rate hike was a mistake, but the current market conditions aren’t helping. And this could mean the Fed may postpose its rate hikes – based on the Fed’s dot-plot the next hike should have been in March. Based on recent market developments, the Fed should present a dovish statement to help calm the markets – at least as best as it can.

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As of the end of last month, based on Fed-watch, the implied probability for a March hike slightly rose to 29%; for a June hike the chances were 39%. By the end of the year, the market still expects the Fed’s cash rate will be, on average, 0.67% — slightly more than one rate hike.

If the Fed releases a dovish statement – bear in mind there is no press conference or revised outlook this time – this could help, even if over the immediate term, push up gold and silver prices.

The other main report of the week is the GDP for Q4. This will be the first estimate. Currently the market expects a 0.8% gain. Even though the correlation between gold and the GDP surprise is next to zero, the USD/Yen and GDP surprise is positive at 0.52. And the correlation between USD/Yen and gold is also strong at -0.38. So there could still be an indirect relation between the GDP surprise and the direction of gold. In any case, the surprise of the GDP will be mostly important for the direction of USD and equities and less to gold and silver.

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But it could be another factor that the FOMC members will take into account in their decision (they are likely to get a preview of the estimate). So if the GDP comes out even lower than expected, this could influence the FOMC members to postpone their decision to raise rates.
In terms of ETFs holdings: By the end of last week, gold holding of the gold ETF SPDR Gold Trust (GLD) rose again by 0.95%, week on week, to 664.17 tons of gold; silver holdings for the silver ETF iShares Silver Trust (SLV) declined by 1.1% to 311.6 million ounces.

Bottom line
Gold and silver didn’t do much last week, but they could resume their rally from the beginning of the year if the Fed winds up releasing a dovish statement. Also, if the bearish market sentiment, which has subsided by the end of the week, resumes, this could also drive up the demand for precious metals. But if the Fed doubles down and doesn’t backs off from its hawkish stance this could result in additional selloffs of precious metals.

Samirofi
02-01-2016, 03:21 PM
Gold and Silver Outlook for February 1-5


Gold and silver prices rallied again last week but mostly at the start of the week before the FOMC released its statement, which was considered by many balanced. This week the NFP report could move gold and silver prices. But there is also news coming from China on manufacturing PMI – this could steer back the conversation towards the tribulations of China’s economy. And so far this year, the growing concerns over a global economic slowdown – in part due to direction of the Chinese economy – could drive back up, even if for a short term, the demand for precious metals. Other reports from the U.S. to consider this week including: manufacturing and non-manufacturing PMI, factory orders, and core PCE. So let’s examine what’s up ahead for gold and silver for the week of February 1-5:


As expected to Fed didn’t raise rates and addressed market volatility, low inflation rate and possible slower growth in the U.S. But the reaction for gold and silver was a bit, as presented herein, underselling. Perhaps bullion investors were expecting for a more dovish tone statement.

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Following the rate decision, based on Fed-watch, the implied probability for a March rate raise fell to 15%; for a June hike the chances were lowered to 33%. By the end of the year, the market still expects the Fed’s cash rate will be, on average, 0.55% — less than one rate hike. And the chances of hike fell from 72% to 53%. So the market is less incline to believe there will be even a single hike in 2016.

The big event of the week will be the NFP report for January. After three solid reports that showed strong buildup in jobs, steady unemployment and rise in wages, all eyes will be to see if the NFP report starts to show slower growth or a possible reversal in job gains – the low GDP growth rate and disappointing consumer spending reports may start to show in the jobs reports. If so, this could further raise the chances of nary rate hike this year by the Fed – another short term boost for PM prices.

In terms of market reaction, as you can see below, the PM prices tend to react to surprises in the headline figure.
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The linear correlation between the daily percent change of gold and the surprise in the NFP headlines figure is -0.49, which is a strong and negative correlation. So if the NFP shows a lower than expected gain in jobs – this week the market estimates a gain of 192K – then gold and silver prices may rise on Friday.
When it comes to changes in ETFs holdings: By the end of the previous week, gold hoards of the gold ETF SPDR Gold Trust (GLD) increased again by 0.76%, week on week, to 669.23 tons of gold – it’s up by 4.2% since the beginning of the year; silver holdings for the silver ETF iShares Silver Trust (SLV) fell again by 0.7% to 309.5 million ounces.

Final point

Precious metals rallied last week, but their recovery slowed down in the past several days: The Fed, as expected, experienced its concern over global economic gloom and low inflation, which could remain low for a while. This statement wasn’t enough to keep driving up gold and silver as it wasn’t too dovish or unexpected. This week, however, if the NFP shows lower than expected results and the bearish market sentiment, which has subsided in the last few days, returns – mostly if China’s economic woes get back to center stage – then PM prices could see further short term gains.