Gold and Silver Outlook for February 4-8

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Submitted by Trading NRG as part of our contributors program .

Gold and silver continued to trade up last week; their rally coincided with the appreciation of the Euro and Canadian dollar again the USD and other commodities such as oil. The FOMC kept its policy unchanged. This news, however, seems to have been crowded out by the U.S GDP quarterly update - the U.S GDP for Q4 fell by 0.1%. This news may have contributed to the rise of precious metals. On the other hand, several U.S reports were published last week and were positive: the manufacturing PMI in the U.S grew to 53.3% and the non-farm employment rose by 157k. This latter number, though positive, was lower than many had anticipated. The rate of unemployment remained at 7.9%. This news may have also pressured up precious metals rates even despite the rise in employment. Will gold and silver continue to trade up next week?

In the video report herein provides an outlook of gold and silver that include the main publications and events that may affect precious metals during February 4th and February 8th. Some of these reports include:

Tuesday - U.S. ISM Non-Manufacturing PMI: During December 2012 this index rose to 56.1% - this means the non-manufacturing is growing and at a faster pace than in the previous month;

Thursday - ECB Press Conference and Euro Rate Decision: Back in July 2012 the ECB lowered its cash rate by 0.25pp to 0.75%. Since many continue to speculate when will the ECB lower the rate again because: the economic situation in EU isn't improving; the inflation and monetary development aren't growing. Thus, the ECB might lower the rate by another 0.25pp in the near future. If ECB will cut the rate again, it may pull down the Euro;

In conclusion, I guess gold and silver will continue to slowly rise during the week. The upcoming rate decisions might affect not only the currencies markets but also precious metals prices. If RBA will decide to lower the rate again, this could adversely affect the Aussie dollar and thus pull down gold and silver. I guess that ECB and BOE will keep their current monetary policy and interest rates unchanged. In such an event this might pull up their respective currencies as was the case last month. Such an event might also pressure up commodities prices. The upcoming reports regarding the U.S economy including: trade balance, non-manufacturing PMI and jobless claims, could affect the USD and precious metals prices: if these reports will show growth in the U.S economy, they may adversely affect gold and silver. The U.S money base has sharply grown in recent weeks, which could lead to a rise in the demand for gold as a safe haven investment against the potential depreciation of the USD. InIndia, another major player in the gold market, if the Indian Rupee will continue to strengthen against the USD, as it did last week; it may positively affect the demand for gold inIndia.

For further reading:

Gold and Silver Outlook for February

Weekly Outlook of Financial Markets for February 4-8



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: ABX , GG , RIO , SLW

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