Major stock markets around the world including S&P500, NASDAQ and Hang Seng recorded sharp falls in their indexes, while the US dollar appreciated very sharply against major currencies, along with gold and silver. What is next for gold and silver? Today, the US labour report will be published, the Canadian employment report and Canadian building permits
For the complete gold and silver outlook report see here .
Gold and silver–August
Gold price changed direction again and fell yesterday by 0.44% and reached $1,659. Silver sharply declined by 5.57% to $39.43.During August, gold increased by 1.7% and silver fell by 1.7%.
S&P500 / Gold & silver– August update
The S&P500 along with other stock indexes from around the world fell very sharply yesterday over the concerns of US falling into a double dip recession. This reaction dragged along with it all major commodities including gold and silver. The correlation between bullion prices and S&P500 isn’t reliable, but yesterday the falls in the stock markets may have also dragged along major commodities.
USD/ Gold & silver– August update
The Euro/USD exchange rate sharply declined yesterday by 1.61%; the USD also appreciated against other currencies including the AUD and YEN. The drop in the Yen is probably one of the reasons for the appreciation of US dollar against other currencies. If the USD will continue to appreciate during the day, this might continue to affect the recent rally of gold and silver. On the other hand, the weak correlations of gold and silver with major currencies during July might suggest that the recent reactions of USD will have a short term effect on gold and silver.
U.S employment report
Last month the U.S. employment report showed that the labour force rose at a much slower pace than in the past few months, as the number of non-farm employees increased during June by only 18,000 compared with an increase of 25,000 during May. The current expectations are that this trend will continue in July; if this will be the case and we are headed towards another disappointing labour report, the US dollar might change direction and drop which could strengthen gold and silver.
Gold and silver Outlook:
Gold and silver changed direction yesterday due (in part) to the appreciation of US it seems that the recent news from Japan will continue to curb the rally of gold and silver during the day; this effect, however is likely to dissipate very soon especially if the US labour report will show no improvement; and if so, the rally of gold and silver is likely to resume..
For further reading: Weekly outlook for August 1-5
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.