Gold and Silver Outlook for December 30- January 3
The prices of gold and silver changed direction and rallied during last week. The low volume of trade kept the prices of gold and silver with little movement. On a weekly scale, however, both precious metals have rallied. The price of silver has erased its decline from previous weeks. Gold price is still down for the month. The aftermath of the FOMC decision, in which the Fed tapered QE3 by $10 billion to $75 billion, seem to have had short term effect on the prices of gold and silver. During last week, jobless claims sharply decreased by 42k to 338k. This news may have contributed to the slight recovery of the USD against the Aussie, CAD and Yen during last week. Next week, much like last week, the volatility of precious metals might rise on account of the low trading volume. Herein is a short overview showing the main reports and events that will come to fruition during December 30th and January 3rd and may affect precious metals prices.
Following the aftermath of the FOMC meeting and the mini-tapering, the strong adverse reaction to this decision — gold and silver plummeted during that week — may have been a bit an overreaction. The gold and silver slightly recovered last week and the low volume of trade could allow this recovery to continue on this low thrill week.
This week several reports will be released including: pending home sales, consumer confidence, manufacturing PMI and jobless claims; they could have some moderate effect on US dollar and precious metals prices.
In conclusion, this week gold and silver might continue their last week’s rally: The low volume of trade could keep the recent upward trend. Nonetheless, the ongoing decline in demand for gold and silver as investments are likely to maintain their prices close to their current levels. Therefore, for the last week of the year I remain neutral on gold and silver.
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