Gold and Silver Outlook for January 29

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

The prices of gold and silver declined yesterday. This decline continued last week‘s downward trend. The decline of precious metals coincided with the fall of several currencies including the Euro Aussie dollar and Canadian dollar against USD. Will gold and silver continue to fall? Today the FOMC will start its two day deliberations that will end tomorrow. Yesterday, several reports came out: based on the U.S core durable goods report, new orders rose in December by 4.6%; pending home sales index fell by 4.3%; EU monetary development report showed a drop in M1, M3 and loans for private sector. The U.S reports showed a mixed signal regarding the progress of the US economy. The EU monetary development report showed the EU economy isn’t progressing. This news may have contributed to the fall of the Euro yesterday. On today’s agenda: German Consumer Climate, and U.S Consumer Confidence.

On Monday, the price of gold declined by 0.22% to $1,652.9; Silver price also declined by 1.36% to $30.76. During the month, gold decreased by 1.31%; silver rose by 1.93%.

Currencies / Bullion Market – January Update

The Euro/ USD edged down on Monday by 0.06% to 1.3456. Moreover, some currencies such as Aussie dollar and Canadian dollar depreciated yesterday against the USD by 0.06% and 0.04%, respectively. The recent depreciation of these “risk currencies” may have contributed to the recent fall in precious metals. The correlations among gold, Canadian dollar and Aussie have strengthened in recent weeks: during January, the linear correlation between gold and USD/CAD reached -0.27 (daily percent changes); the linear correlation between the gold and AUD /USD reached 0.44 (daily percent changes). If the Aussie dollar and Canadian dollar will continue to depreciate against the USD, they might adversely affect bullion.

On Today’s Agenda

German Consumer Climate: Gfk group will come out with its German consumer climate index. If this report will continue to show a fall, it might pull down the Euro;

U.S Consumer Confidence: according to the previous report, the consumer confidence index decreased in November (M-o-M). The current expectations are that the January index may bounce back; this report might affect commodities markets;

For further reading:

Gold and Silver Outlook for January 28- February 1

Weekly Outlook Financial Markets for January 28- February 1

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