Gold and Silver Outlook for February 12

by Lior Cohen
Barrick Gold
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Submitted by Trading NRG as part of our contributors program.

The prices of silver and gold continued their downward trend from last week and sharply fell on the first day of the week. Their decline coincided with the depreciation of several leading currencies such as the yen and Aussie dollar against the USD. Will gold and silver change direction and rally this week? On today’s agenda: Swiss Inflation report, Great Britain CPI, ECONFIN Meetings, BOE Inflation letter, SNB Chairman Jordan’s Speech BOC Governor Carney Testifies, ECB President Speaks and U.S. Federal Budget Balance.

On Monday, the price of gold fell by 1.07% to $1,648.4; Silver plummeted by 1.69% to $30.91. During the month, gold decreased by 0.73%; silver, by 1.36%. Despite the fall in precious metals rates, the forex market moved in a mixed trend: the Japanese yen and Aussie dollar sharply depreciated against the USD while the Euro inched up by 0.29%. The linear correlation between and several leading currencies pairs such as USD/Yen and AUD/USD are still mid-strong at -0.33 and 0.38, respectively. They suggest that if these currencies will continue to fall against the USD, they might also pressure down bullion rates.

On Today’s Agenda

Great Britain CPI: this report will refer to the GB’s consumer price index as of January; in the previous monthly update, the annual CPI remained stable at 2.7%; if this the inflation will grow, it could lower the odds of the MPC augmenting its asset purchase program next month; this news might also affect the British pound;

ECONFIN Meetings: EU ministers of finance and EU leading policymakers will convene for the monthly meeting. In this meeting the EU ministers will likely discuss the recent multi-year EU budget decision and future development of the EU economy;

ECB President Speaks: Following last week’s press conference, in which Draghi referred to the strength of the Euro, the slow recovery of he EU economy and the expected fall in the inflation during the year, the market will see if Draghi will compensate and be optimistic regarding the future of the EU economy;

U.S. Federal Budget Balance: this upcoming report will present the developments in the U.S federal balance for January 2013; this report indicates the government debt growth and thus may affect the U.S dollar. In the latest report regarding December the deficit remained virtually unchanged’ the total deficit for the fiscal year of 2013 is at $293 billion. In comparison, the deficit in the same time in 2012 was $321 billion; this is decrease of 9.7% compared to 2012.

For further reading:

Gold and Silver Outlook for February 11-15

Weekly Outlook Financial Markets for February 11-15

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