The prices gold and silver continue to shift with an unclear trend as both precious metals changed direction and edged up on Wednesday. Both precious metals have been zigzagging with unclear since September 13th, following the announcement of the Fed to launch QE3. Yesterday, the U.S non-manufacturing PMI report came out: the index rose again to 55.1, which means the non-manufacturing PMI sector continued to grow at a slightly faster pace. The ADP estimated that number of new jobs added in the U.S during September was 162k. If these figures will be close to the numbers presented tomorrow in the U.S non-farm payroll report, then this could help rally commodities and stock prices. On today’s agenda include: Minutes of September’s FOMC Meeting, Great Britain Bank Rate & Asset Purchase Plan, ECB Euro Rate Decision, U.S. Jobless Claims , Bank of Japan – Rate Decision, French 10 Year Bond Auction.
On Today’s Agenda
Minutes of September’s FOMC Meeting: Following the recent FOMC meeting the bullion market reacted to this news – gold and silver hiked on the day of the announcement. The minutes of the recent FOMC meeting might add some additional perceptive and insight behind this decision and the future steps of the FOMC especially in anticipation of the upcoming FOMC meeting at the end of October;
Great Britain Bank Rate & Asset Purchase Plan: as of September BOE’s rate remained unchanged at 0.5% and the asset purchase plan was left at £375 billion;
ECB Euro Rate Decision: Since many EU countries are still struggling, and since the FOMC decided on QE3, ECB might decide to make another rate cut in the near future by another 0.25pp. If ECB will cut the rate again, it may affect the Euro;
U.S. Jobless Claims: in the latest report the jobless claims declined by 26k to 359,000; this upcoming weekly report may affect the USD and consequently the rates of commodities;
Currencies / Bullion Market – October Update
The Euro/ USD slipped on Wednesday by 0.12% to 1.2905. Further, other currencies including AUD and CAD also depreciated yesterday against the USD. As seen below, the linear correction between the Euro/USD and gold remained around the 0.6-0.7 in the past couple of months. If these currencies and the Euro will continue to trade up against the USD, then they are likely to pull up gold and silver.
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