The prices of gold and silver, as expected, hiked during yesterday as a clear cut market reaction to the publication of the minutes of the FOMC meeting. The minutes revealed that many FOMC members consider “monetary accommodation would likely be warranted fairly soon”. In other news: The U.S new home sales report came out and showed a rise in sales. This news might have some lingering effect on today’s bullion market. The U.S. jobless claims rose by 4k to reach 372k. On today’s agenda: GB revised GDP Q2 2012, and U.S Core Durable Goods.
On Thursday, Gold hiked by 1.97% to $1,672.8; Silver also traded up by 3.04% to $30.54. During August, gold rose by 3.6%; silver, by 9.4%.
The ratio between the two precious metals declined again on Thursday to 54.77. During August the ratio decreased by 5.31% as gold under-performed silver.
On Today’s Agenda
GB revised GDP Second Quarter 2012: This report will present the revised quarterly growth rate of the British economy during the second quarter of 2012; according to the preliminary estimate the second quarter contracted by 0.8% (yearly scale);
U.S. Core Durable Goods: This report may indirectly present the changes in U.S. demand for commodities such as crude oil. As of June 2012, new orders of manufactured durable goods rose by $3.4 billion to $221.6 billion; if this report continues to be positive then it could strengthen not only the USD but also bullion;
Precious metals hiked during yesterday, as an expected reaction, following the publication of the minutes of the FOMC meeting that rekindled the expectations from the Fed to issue another quantitative easing plan in the near future. I still think it’s not certain how this QE will help the U.S. economy because it seems there is a diminishing return for QE programs. The news of the rise in new home sales sold may curb the rally of bullion rates while the rise in U.S. jobless claims could have adversely affected the USD. Today’s reports including GB GDP and U.S core durable goods could also play a role in today’s precious metals markets (as specified above).
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