Guest Commentary: Gold Daily Outlook 09.07.2011
Gold Daily Outlook September 7
Gold and silver started the week with light falls, despite yesterday's decline in the US stock markets. Currently, gold and silver are traded down as the US stock markets are rising. Yesterday's losses were probably related, in part to the appreciation of the USD. Today, the Australian unemployment report will be published, and Canada overnight rate decision.
Let's examine the precious metals market for today, September 7th:
Gold and silver finished yesterday with moderate falls: Gold price slightly fell on Tuesday by 0.19% to $1,873; silver also declined by 2.79% to $41.87. During September, gold increased by 2.3%, and silver by only 0.2%. The chart below (normalized gold and silver (August 16th 2011=100)) shows the price development of precious metals in the past couple of weeks.
ISM Non-Manufacturing PMI Index Slightly Inclined in August
The U.S. non-manufacturing PMI index grew for the 21st consecutive month, and slightly inclined from 52.7% in July to 53.3% in August. This encouraging report may have curbed some of the falls in the stock markets, lowered a bit the pessimism in the financial markets in regards to the US economy.
On Today's Agenda:
Canada overnight rate: The BOC may keep the rate unchanged, despite the slight increase in inflation rate to 2.7% (in annul terms). This decision could affect the CAD/USD; there are strong correlations among the Canadian dollar and major commodities that export including gold;
USD/ Gold & Silver– September Update
The Euro/USD declined again for the fifth straight business day, yesterday by a very sharp rate of 1.46%; this ongoing appreciation of USD against the Euro might have affected the trade on gold and silver and may have caused gold and silver to trade down yesterday.
S&P500 / Gold & Silver– September Update
The S&P500 slightly fell yesterday by 0.74%. During August- September the S&P500 had negative correlations with the daily percent changes of gold and silver; so that if the S&P500 will further declined today, it may curb some of the falls in gold and silver throughout the day.
Gold and Silver Outlook:
Gold and silver suffered a trim yesterday, and they are currently also being traded down, These falls aren't consistent with the decline in US Treasury bills or the decline in US stock markets; it could well be the persistent and sharp appreciation of US dollar against major currencies. It could also be a technical correction to the recent sharp gains in the past few days in gold and silver. There may be additional correction throughout the day and the rest of the weak but all in all I still think gold and silver will continue to rise at a slow pace.
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.
By: Lior Cohen, Energy Analyst for Trading NRG
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