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Guest Commentary: Gold & Silver Daily Outlook 04.27.2012

Guest Commentary: Gold & Silver Daily Outlook 04.27.2012

Lior Cohen, Energy Analyst for Trading NRG,

Gold and silver sharply rose yesterday and thus rallied from their decline on Wednesday. Bank of Japan announced it will expand stimulus and will purchase government bonds by 10 trillion yen (roughly $124 billion). This means the asset purchase fund will rise to 40 trillion yen. S&P cuts Spain's credit rating from A to BBB+. Finally the rating agency had harsh words against Euro Area's handling its debt crisis. These events may slightly affect forex and commodities markets.

On today's agenda: U.S GDP for Q1 2012, KOF Economic Barometer, and Bank of Japan Press Conference. Yesterday's Updates: The U.S jobless claims slightly declined; U.S pending home sales rose in March.

Gold rose on Thursday by 1.11% to $1,660.5; silver even more than gold prices increased by 2.8% to $31.28. During April, gold decreased by 0.68% and silver by 3.72%.

The chart below shows the changes of bullion during recent weeks (normalized to 100 as of March 30th).

Guest_Commentary_Gold_Silver_Daily_Outlook_04.27.2012_body_Gold_27.png, Guest Commentary: Gold & Silver Daily Outlook 04.27.2012

On Today's Agenda

U.S GDP 1Q 2012: The current expectations are that the growth rate in the first quarter will be similar to the fourth quarter of 2012. This news may affect forex and gold and silver (for the final estimate of 4Q GDP).

Bank of Japan Press Conference: Following the Bank's decision to expand it monetary expansion of roughly $124 billion, a press conference will be held today; this conference may shed some light on this decision and thus may affect not only the Yen but also commodities prices;

Forex / Bullion– April

The Euro/USD nearly didn't change on Thursday as it edged up by 0.01% to 1.3218; on the other hand, the AUD slightly appreciated yesterday against the USD by 0.37%. If the USD will change direction and appreciate against the abovementioned currencies, this may signal gold and silver will trade down.

Daily Outlook

Bullion bounced back yesterday from their decline on Wednesday. The recent developments in Euro zone including the S&P's announcement to downgrade Spain and its criticism towards the Euro Area's handling of the debt crisis might adversely affect the path of the Euro and thus may also adversely affect a bit commodities. More importantly, if the U.S GDP growth rate will hit expectations, this may strengthen the USD and consequently bullion may trade down a bit.

This gold and silver prices outlook was first presents in Trading NRG

For further reading:

Weekly Outlook for 23-27 April 2012

Gold and Silver Prices Weekly Outlook for April 23-27

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.