Gold and Silver Outlook for February 28
Submitted by Trading NRG as part of our contributors program.
The prices of gold and silver changed direction and fell after they had increased at the first couple of days of the week. After Bernanke’s testimony in the Senate, he turned to the House of Representatives yesterday. Bernanke remained about the Fed’s monetary policy even though several Congressmen questioned the effect of the Fed’s policy on the U.S economy. In other U.S news, pending home sales were up in all regions according to the recent report. New orders of durable goods declined in January by $11.8 billion or 5.2% to reach $217 billion. Capital goods and shipments of durable goods were also down. The recent quarterly report of Private New Capital Expenditure and Expected Expenditure in Australia came out (regarding Q4 2012): new capital expenditures (seasonally adjusted) were down by 1.2% compared to the previous quarter but was up by 10% compared to the same quarter in 2011. This news may positively affect the direction of the Aussie dollar. Will gold and silver change direction again today? On today’s agenda: Euro Area CPI, Second U.S GDP 4Q 2012 Estimate, U.S. Jobless Claims and China Manufacturing PMI.
On Wednesday, the price of gold changed direction and fell by 1.23% to $1,595; Silver also decreased by 1.08% to $28.94. During the month, gold decreased by 7.63%; silver, by 7.63%.
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The gold and silver futures volumes of trade declined on Wednesday to 197 thousand and 82 thousand, respectively. These numbers are lower than the volume traded on Tuesday. If the volume will bounce back in days to come, this might lead to an increase in volatility of the precious metal prices. The chart below presents the volume of trading gold and silver futures in the CME during the month.
On Today’s Agenda
Second Estimate of U.S GDP 4Q 2012: This will be the second estimate of U.S’s fourth quarter 2012 real GDP growth. In the previous estimate the U.S GDP contracted by 0.1% in the fourth quarter; in the third quarter the GDP expanded by 2.7%; in the 2Q2012 the GDP growth rate reached 1.7% (annual rate). This presents a drop in the growth rate for the US’s GDP. If there will be a sharp shift in the growth rate from first to the second Q4 estimate, this could affect not only the US dollar but also commodities prices.
U.S. Jobless Claims: in the recent report the jobless claims rose by 20k to reach 362k; this upcoming weekly report may affect the U.S dollar and consequently precious metals markets;
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