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Guest Commentary: Gold & Silver Daily Outlook 02.23.2012

Guest Commentary: Gold & Silver Daily Outlook 02.23.2012

2012-02-23 16:57:00
Lior Cohen, Energy Analyst for Trading NRG,
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Gold continued its slow upward trend and moderately increased yesterday, while silver changed direction and was traded down. The recent manufacturing PMI reports showed that EU and China's manufacturing might have shrunk during February. This news may have curbed the rally of gold and silver during yesterday's trading. Today, there is the G20 Meeting, U.S. Unemployment Claims weekly update will be published and the Governor Stevens testifies.

See here for the complete analysis on gold and silver daily setup.

The ratio between gold and silver sharply rose on Wednesday, February 21st and reached 51.60. During February the ratio slightly declined by 1.39% as silver has moderately outperformed gold. In the chart below are the changes in this ratio during February.

Guest_Commentary_Gold_Silver_Daily_Outlook_02.23.2012_body_Ratio__22.png, Guest Commentary: Gold & Silver Daily Outlook 02.23.2012

On Today's Agenda

U.S. Unemployment Claims:initial claims decreased by 13,000 to 348,000 claims for the week ending on February 11th; the number of insured unemployment also decreased by 100k to 3.426 million during the week of February 4th; the upcoming weekly update might affect the direction of the US dollar and consequently gold and silver;

Euro/USD and Metals – February

The Euro/USD slightly rose on Wednesday by 0.11% to 1.3249. During February Euro/U.S Dollar increased by 1.3%. The correlations among the Euro and precious metals are still robust (the linear correlation between the Euro/USD and gold price is 0.32). Therefore, if the Euro will continue resume its rally; it could indicate that gold and silver will also rise.

Guest_Commentary_Gold_Silver_Daily_Outlook_02.23.2012_body_Correlation_22.png, Guest Commentary: Gold & Silver Daily Outlook 02.23.2012

Daily Outlook

Gold and silver didn't do much yesterday after they had started the week with very sharp gains. The upcoming U.S. unemployment claims weekly update might affect the direction of gold and silver via their relation with U.S dollar. I speculate these metals will continue their rally but at a slower pace than at the beginning of the week.

For further reading:

What Are the Potential Outcomes for Gold Price in 2012?

By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG

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