MCX Gold Silver Weekly Reports (09 July - 14 July 2012) :-
Last week gold and silver prices didn’t do much at the first few days of the week but after the Fourth of July Vacation precious metals tumbled down. This decline was mostly likely due to the ECB rate reduction from 1% to 0.75%. This news adversely affected not only the Euro but also other markets such as oil gold and silver. The other news item was published on Friday: the U.S non-farm payroll report showed only 80k added jobs.
This news also dragged down commodities rates. This upcoming week the main events that may affect gold and silver prices will revolve around U.S trade balance, the minutes of the latest FOMC meeting, China’s GDP for Q2, Euro Council Meeting and U.S core PPI. Gold price decreased during last week by 1.58%; Silver, even more than gold, declined on a weekly scale by 2.51%. Furthermore, during last week the SPDR Gold Shares (GLD) also fell by 0.95% and reached by July 6the 153.71.
The Euro also sharply fell against the U.S dollar by 2.97% (on a weekly scale). Nonetheless, the sharp fall in Euro/USD mainly after the EU rate cut may have been among the factors to drag down gold and silver during last week. If these currencies will continue to decline, it could further pull bullion rates down.
Weekly Outlook: precious metals may continue to trade down during the upcoming week. The recent rate cut by ECB may continue keeping the Euro/USD from bouncing back. If the Euro and other rates will continue to trade down against the USD, this trend could also adversely affect precious metals. If China’s GDP growth rate in Q2 will be lower than the growth rate in Q1, this could adversely affect commodities prices. Finally, the upcoming reports regarding the U.S including core PPI, trade balance and minutes of the recent FOMC meeting could affect precious metals rates. If the FOMC won’t hint in its minutes of another QE program in the near future, it could withhold gold and silver from bouncing back.
