News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Guest Commentary: Gold & Silver Daily Outlook 08.02.2012

Guest Commentary: Gold & Silver Daily Outlook 08.02.2012

Lior Cohen: Commodities Analyst,

The prices of gold and silver declined for the second consecutive day after the FOMC didn't announce any additional monetary expansion plans. As I have pointed out, without another QE program, precious metals will likely to remain flat. The U.S manufacturing PMI edged up to 49.8 but is still showing contraction. According to ADP, U.S non-farm payroll rose by 163k in July. If tomorrow's non-farm payroll report will show similar results it could boost the stocks and commodities markets. On today's agenda: Great Britain Bank Rate decision, ECB Euro Rate Decision, U.S. Jobless Claims, and U.S Factory Orders.

Gold declined on Wednesday by 0.45% to $1,607.3; Silver also decreased by 1.36% to $27.54. During the week, gold fell by 0.95 %; silver edged up by 0.13%.

As seen, the chart shows the normalized prices of precious metals in recent weeks (normalized to 100 as of July 16th).

Guest_Commentary_Gold_Silver_Daily_Outlook_August_2_2012_body_Gold___August_2.png, Guest Commentary: Gold & Silver Daily Outlook 08.02.2012

FOMC Left Policy Unchanged

As many had expected the FOMC left its policy unchanged. The recent testimonies of Bernanke at the Hill and the minutes of last month's FOMC meeting, have all pointed out that this the Fed won't make any big announcements in this statement. This news didn't help bullion rates and could continue to adversely affect precious metals in the days to come.

On Today's Agenda

ECB Press Rate Decision: In previous interest rate decision the President of ECB, Mario Draghi reduced the EU interest rate by 0.25pp to 0.75%; the recent deprecation of the Euro may affect the upcoming ECB rate decision; if ECB will change again the rate, it may affect the Euro;

U.S. Jobless Claims: in the latest update the jobless claims fell by 35k to 353,000; this upcoming weekly report may affect the U.S dollar and consequently commodities;

Currencies / Bullion Market – July/August Update

The Euro/USD changed direction again on Wednesday and fell by 0.64% to 1.2225. Further, other currencies including AUD and CAD also depreciated against the USD. The correlations between gold and the above-mentioned rates remain strong: during the month, the correlation between the gold and EURO/USD reached 0.7 (daily percent changes); the correlation between gold and AUD /USD, 0.61.

Daily Outlook

The upcoming rate decisions of MPC and ECB could affect the forex markets if there will be a significant announcement. Finally, the upcoming American reports including jobless claims and factory orders could affect not only the forex markets but also bullion rates. If the Euro and other "risk currencies" will resume their downward trend, this could also drag down precious metals rates.

For further reading: On the Relation between QE Programs and Gold

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

Would you like to see more third-party contributors on DailyFX? For questions and comments, please send them to

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