Guest Commentary: Gold & Silver Daily Outlook 06.12.2012
Gold and silver started off the week with little movement as both metals shifted from gains to losses throughout the day (Monday) until both metals settled in the green column. It's still unclear if the €100 billion bailout that Spain asked from the EU will be enough. Italy plans to auction €9.5 billion of debt this week. If the yields will surge it could raise the concerns around the EU debt crisis. China's new loans exceeded expectations as the money supply growth accelerated. On today's agenda: Great Britain Manufacturing Production, U.S. Federal Budget Balance, Bank of Australia Governor Stevens will give a speech.
The chart below shows the normalized rates of these metals during the month (normalized to 100 as of May 31st).
On Today's Agenda
U.S. Federal Budget Balance: this upcoming U.S federal budget monthly update will refer to May 2012; this report indicates the government debt growth and thus may affect the USD. In April the deficit declined by $59 billion to a deficit of $719 billion for (fiscal year of 2012); if this trend will continue it could further appreciate the USD and thus might also adversely affect bullion;
Currencies / Bullion Market – June Update
The Euro/USD slipped on Monday by 0.28% to 1.2482. Furthermore, other exchange rates such as the AUD and CAD also depreciated during Monday. If the USD will further appreciate against these currencies, it may drag down bullion.
Bullion started off the week rising despite the decline in other commodities and the depreciation of Euro. This low volatility may continue today. The upcoming U.S federal budget update could affect not only the USD but also precious metals rates. If the deficit will further rise it could positively affect the USD. The speculation around the developments in Europe vis-à-vis the debt crisis, mainly Spain, is likely to keep the speculation high and thus affecting the markets' movements.
This gold and silver prices outlook was first presents in Trading NRG
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By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG
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