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Gold and Silver Outlook for March 4-8
Gold and silver inched down during last week, despite their sharp rally at the first couple of days. Bernanke remained dovish in his testimony at the Hill vis-à-vis the Fed's monetary policy; he kept defending it and stating this expanding policy could go on for a long time. In the U.S several reports were published and showed some signs of growth: the manufacturing PMI rose to 54.2 as of February; the second estimate of the fourth quarter of GDP was revised upwards to 0.1% gain; jobless claims changed direction and fell by 22k to reach 344k. The sequester came into play on March 1st. It includes a $85 billion spending reductions in 2013. Will gold and silver trend down next week?
The price of gold inched down during last week by 0.03%; conversely, during last week, the average rate reached $1,589.18 /t. oz which was 0.06% above last week's average rate. Gold ended the week at $1,572.3 /t. oz.
In the video report herein there is an outlook of gold and silver that include the main publications and events that may affect precious metals during March 4th and March 8th.
In conclusion, the main events of the week will revolve around the monetary policy meetings of the central banks of EU, Japan, England, Canada, and Australia. If any of these central banks will decide to change the policy will be unexpectedly changed by cutting rates or expanding asset purchase programs, then this could affect their respective currency and indirectly precious metals. For now, many of these banks are likely to keep their rates unchanged. Bank of Japan might augment its asset purchase program, which could affect the direction of the Japanese yen and further pull it down. Nonetheless, the recent currencies wars seem to have a moderate effect on the path of gold and silver. In the U.S the main reports to be published this week include: non-farm payroll, trade balance, and jobless claims could affect the USD and precious metals. If the reports will show signs of growth, they could adversely affect precious metals. The FOMC's QE3 program contributes to the rise in the U.S money base but unlike in 2008-2010 it doesn't seem to help rally precious metals prices. The stability of the U.S inflation and the strengthening of the USD against leading currencies including Yen and Euro might be pulling away safe haven investors from investing in precious metals to protect their investment against the devaluation of the USD.
For further reading:
Gold and Silver Outlook for March