Gold and silver continue to change direction with an unclear trend as they have shifted from gains to losses every day in the past week and a half. Yesterday it was reported that the U.S ISM Non-Manufacturing PMI remained nearly unchanged and the Australian GDP expanded by a higher than expected rate. This news could help rally not only the AUD but also bullion. On today’s agenda: ECB will announce its decision on the Euro Rate, German Industrial Production report, FOMC Member Lockhart Speaks, Australian Rate of Unemployment.
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Gold bounced back and edged up on Tuesday by 0.19% to $1,616; silver also increased by 1.42% to $28.41. During the month gold traded up by 3.37% and silver by 2.33%.
Australian GDP Sharply Rose in Q1 2012
The recent slowdown in China’s growth didn’t seem to hold back the expansion of the Australian economy: during the first quarter of 2012 the economy expanded by 1.3% (Q-o-Q), which represents a 4.3% annual growth (seasonally adjusted). This is a higher rate than many had anticipated. This news is likely to pull up the Aussie dollar which is positively correlated with precious metals prices.
On Today’s Agenda
ECB Euro Rate Decision: As of last month, President of ECB, Mario Draghi kept the rate unchanged at 1%; as of April, the inflation declined to an annual rate of 2.6%, the EU unemployment edged up to 10.9% and the EU GDP in the Q1 2012 was 0%. ECB might consider remaining on the sidelines until the uncertainly around Greece and Spain will dissipate. Having said that, if the ECB will change its interest rate, it is likely to affect the Euro/USD and consequently may also affect precious metals;
Australia Rate of Unemployment: the number of employed rose by 15,500 people in April. If this positive trend ill continue to could further push up the AUD;
Currencies / Bullion – June Update
The Euro/USD slipped yesterday by 0.38% to 1.2453.. On the other hand, other exchange rates such as the AUD and CAD slightly appreciated during Tuesday. The recent positive GDP report of Australia could help boost the Aussie during today’s trading. If the U.S dollar will resume its descent against the Euro, it might help rally bullion.
The recent good news of the higher than expected GDP growth rate in Australia is likely to keep the AUD rising and may also positively affect precious metals. If today’s Australian employment report will also be positive it could keep this trend. Today’s ECB rate decision could also play a role in affecting forex and commodities markets providing there will be a big announcement from ECB President.
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