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Guest Commentary: Gold and Silver Outlook September 10-14

Guest Commentary: Gold and Silver Outlook September 10-14

2012-09-10 14:55:00
Lior Cohen, Commodities Analyst, TradingNrg.com,
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The upcoming FOMC meeting between September 12th and 13th will be the highlight for the week for bullion traders. If the FOMC will announce of another quantitative easing plan this news is likely to pull up gold and silver. I still think it's too early to expect another QE program. During last week, the news about the U.S manufacturing PMI may have had a modest impact on precious metals. ECB left rate unchanged at 0.75% but ECB did introduce its bond purchase plan that is waiting for the final approval of Germany and Spain next week.

The video report presents an outlook of gold and silver for the main publications and events that may affect precious metals during September 10th to 14th. Some of these reports include:

Wednesday – German High Court Ruling on EMS: The German Court will publish its final ruling on the legality of the Euro bailout fund, European Stability Mechanism (EMS). If the Court will rule in favor of the program it could help stabilize the Euro;

Thursday – FOMC Statement: The FOMC will convene for the sixth time this year and to decide at the end of two day of meeting on any changes in its monetary policy and interest rate; Following the minutes of recent FOMC meeting, it seems that the market has already concluded that there will be another QE program in the near future. Further, the recent depreciation of the USD, the low growth rate in employment and GDP for Q2 are also adding to the chances of another QE. I think the FOMC won't announce of another stimulus plan in this upcoming meeting. I speculate that even if the FOMC won't announce of another QE program but will only allude to its intention to do so in the near future, this news is likely to further pull up precious metals;

Thursday – U.S. PPI: In the recent report regarding July this index for finished goods rose by 0.3% compared with June's rate and increased by 0.5% in the last 12 months;

Friday –U.S Core CPI: According to the U.S Bureau of Labor statistics during July, the core CPI edged up by 0.1%(M-o-M) and the index rose over the last 12 months by 2.1%; the CPI remained unchanged last month;

In conclusion, I guess bullion rates will continue to trade up on a weekly scale but at a slower pace then they did during the previous week. The hike in bullion rate on Friday, mainly due to U.S non farm payroll report, might suggests the bullion market raises the chances of another QE program. The upcoming FOMC meeting could further pull up the bullion market. Even if the FOMC won't announce of QE3 and will only allude to the fact, it could pull up gold and silver. I still think that the FOMC won't announce just yet of another QE program.

For further reading: Gold and Silver Outlook for September

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

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