Gold And Silver Outlook For February 20
Submitted by Trading NRG as part of our contributors program.
The prices of gold and silver continued to decline yesterday. The FOMC will publish today the minutes of the January meeting. This report might stir up the bullion market if the report will show some big changes or unexpected news. On today’s agenda: Claimant Count Change, Minutes of MPC Meeting, German 10 Year Bond Auction, U.S. Housing Starts and building permits, U.S. Producer Price Index and minutes of the FOMC meeting.
On Tuesday, the price of gold declined again by 0.29% to $1,604.3; Silver also fell by 1.44% to $29.42. During the month, gold decreased by 3.39%; silver, by 6.11%.
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The gold and silver futures volumes of trade have declined on Tuesday (compared to Friday) to 242 thousand and 97 thousand, respectively. These numbers are still higher than average volume recorded during the month. Perhaps the upcoming publication of the minutes of the FOMC will keep raising the market volume during the day. In such a case, we might see sharp movement in precious metals prices as was the case last week. The chart below presents the volume of trading gold and silver futures in the CME during January and February.
On Today’s Agenda
Minutes of January’s FOMC Meeting: Following the previous FOMC meeting, in which the Fed kept its monetary policy unchanged, the bullion market had a very short term reaction to this news – gold and silver prices increased on the day of the announcement only to tumble down the next day. The minutes of the latest FOMC meeting might add some insight behind the speculations around the future steps of the FOMC; the minutes might clarify the Fed’s course of action vis-à-vis the exit strategy for its current running QE programs. If the Fed will put a time limit or hint of changes in the expansion of its monetary policy, this could pull down bullion prices;
U.S. Housing Starts: this report was historically correlated with gold– as housing starts rise, gold prices tended to decline the following day; in the previous monthly report, the adjusted annual rate reached 954,000 in December 2012, which was 12.1% above November’s rate;
U.S. Building Permits: in the previous update, building permits rose during December by 0.3% (M-o-M) in the adjusted annual rate of building permits was 903,000 (the recent U.S building permits update);
U.S. PPI: This report will present the changes in the PPI during January 2013, i.e. the inflation rate from the producers’ stand point. In the previous report regarding December, this index for finished goods declined by 0.2% compared with November’s rate but rose by 1.3% in the past 12 months; this news might affect commodities;
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