Gold and Silver Outlook for February 21
Submitted by Trading NRG as part of our contributors program.
The prices of gold and silver tumbled down yesterday. Their sharp fall coincided with the depreciation of the many “risk related currencies” such as Euro and Aussie dollar against the USD and other commodities prices such as crude oil. Nonetheless, it seems that the publication of the minutes of the January FOMC meeting reheated the speculations around the future steps of the FOMC and when and how the Fed will ease down its current quantitative easing plan. If the Fed will cut the QE3 program – it currently stands on purchasing every month $85 billion of long terms securities and mortgage backed securities – or put a time limit on this asset purchase program, gold and silver prices are likely to tumble down as this news will lower the risk related to the potential devaluation of the USD. Yesterday, it was reported that housing starts declined in January. This news may have had a modest effect on the financial markets. The U.S PPI inched up by 0.2%. Will gold and silver prices keep falling? On today’s agenda: Flash German, French and Euro Zone Manufacturing PMI, Spanish 10 Year Bond Auction, U.S Core Consumer Price Index, U.S. Jobless Claims, U.S. Existing Home Sales, Philly Fed Manufacturing Index and Governor Stevens speaks.
On Wednesday, the price of gold fell again by 1.67% to $1,577.5 – the lowest price since July 2012; Silver also plunged by 2.71% to $28.62 – the lowest since August 2012. During the month, gold decreased by 5%; silver, by 8.66%.
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On Today’s Agenda
Flash German, French and Euro Zone Manufacturing PMI: In the previous report regarding January 2013, the German PMI rose to 48.8 i.e. the manufacturing conditions are still contracting at a slightly slower rate. This report serves as an indicator to the economic developments of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently also precious metals;
U.S Core Consumer Price Index: This monthly report will refer to the main developments in the core consumer price index for January 2013. According to the U.S Bureau of Labor statistics during December, the CPI remained unchanged (M-o-M); the core CPI edged up by 0.1%; the core index rose over the past twelve months by 1.9%.
U.S. Jobless Claims Weekly Report: in the previous report the jobless claims declined again by 27k to reach 341k; this upcoming weekly report may affect the U.S dollar and consequently commodities and stocks markets;
Philly Fed Manufacturing Index: This monthly survey presents an estimate for the progress of the US manufacturing conditions. In the previous January survey, the growth rate fell from +8.1 in December to -5.8 in January (the previous Philly Fed review).
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