Gold and silver changed direction again and declined on Tuesday after they had risen on Monday. The recent news of China’s decline in trade growth during June (as both imports and exports growth fell in June compared with May’s figures) may have contributed to the downfall in bullion rates. The fall was also registered in other markets including oil and U.S stocks. Fitch stated it’s unlikely to U.S’s AAA rating will change before late 2013. The Rating agency is waiting for the debt reduction plan that will be implemented after the elections. There are many items on today’s agenda including: Minutes of FOMC Meeting, American and Canadian Trade Balance reports, German and American 10 Year Bond Auctions, Bank of Japan Monetary Policy Statement, and Australia Rate of Unemployment.
Gold fell on Tuesday by 0.59% to $1,579.8; silver also decreased by 2.05% to $26.88. During July, gold declined by 1.52% and silver by 2.64%.
On Today’s Agenda
Minutes of June’s FOMC Meeting: Following the FOMC meeting from back in June metals tumbled down. The minutes of the FOMC meeting might offer some perspective behind the recent FOMC decision and its future steps especially in anticipation for the upcoming FOMC meeting at the end of July;
American Trade Balance: This monthly report for May 2012 will present the changes in imports and exports of goods and services to and from the U.S; according to the previous American trade balance report regarding April the goods and services deficit decreased during the month to $50.1 billion.
Bank of Japan –Monetary Policy Statement: If the BOJ will introduce a new monetary stimulus plan, it might affect the Yen, other exchange rates and commodities prices;
Today there are many news items on the agenda that could affect not only commodities but also precious metals. The main reports include the FOMC meeting minutes and American trade balance. The FOMC meeting could positively affect precious metals if the minutes will reveal a possibility of another QE program in the near future. I think the FOMC won’t introduce QE3 in the near future. The U.S bond auction might also signal about the market sentiment. The Canadian trade balance might affect the Canadian dollar, which tends to be strongly linked with bullion rates.
Finally, if the Euro and other risk currencies will continue to decline, then they are likely to also pull down bullion.
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