Gold and Silver Outlook for March 20
Submitted by Trading NRG as part of our contributors program.
The prices of gold and silver resumed their moderate movement as both precious metals remained nearly unchanged yesterday. The recent update related to Cyprus is that its parliament rejected the despite levy; this rejections blows the EU bailout plan. This news item might take the back seat today as the main event of the week will be the FOMC meeting that will conclude today with a press conference. If the FOMC will update its economic outlook or change or even hint of any changes in the near future to its monetary policy, then the prices volatility of precious metals are likely to rise. On today’s agenda besides the FOMC meeting include: Great Britain Claimant Count Change, China flash Manufacturing PMI, Japanese Trade balance, Minutes of MPC Meeting, U.S. Housing Starts & Building Permits, GB Annual Budget.
On Tuesday, the price of gold slightly increased by 0.42% to $1,611.3; Silver inched down by 0.14% to $28.81. During March, gold rose by 2.13%; silver, by 1.46%.
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Second FOMC Meeting in 2013
The FOMC will conclude today its second meeting for this year and will announce of any updates to its monetary policy or its economic outlook of the U.S economy. In the previous FOMC meeting, which was held back at the end of January, the Fed didn’t announce of any changes. The table below shows the precious metals market reaction to the news of the FOMC meetings in 2012 and 2013.
Based on the above, if the FOMC won’t change its policy then we might see a similar market reaction to the news of the FOMC meeting. Moreover, Bernanke remained dovish in his recent testimony as do the majority of the FOMC members.
On Today’s Agenda
U.S. Housing Starts and Building Permits: this report was historically correlated with gold – as housing starts declined, gold prices tended to increase the next day (even when controlling to the U.S dollar effect); in the recent monthly report, the adjusted annual rate reached 890,000 in January 2013, which was 8.5% drop December’s rate. On the other hand, building permits rose during January by 1.8% (M-o-M);
China flash Manufacturing PMI: this index will be based on a survey of 800 companies in 20 industries in China; as of the latest the HSBC Manufacturing PMI survey regarding February 2013 the Manufacturing PMI declined to 50.4;
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