Gold and silver started the second week of 2012 with light changes as gold price moderately declined and silver price slightly rose. According to a recent Federal Reserve report, consumer credit is on the rise; this news might indicate that U.S. households are more willing to borrow funds and consequently might affect not only the stock markets but also commodities market. Today, China’s trade balance report will be published.
Gold slightly decline on Monday by 0.54% to $1,680.1; silver on the other hand moderately inclined by 0.35% to reach $28.78. During January, gold rose by 2.6% and silver by 3.1%. The Euro/USD changed direction and slightly rose on Monday by 0.38% to reach 1.2765; other forex exchange rates such as the Australian dollar also appreciated against the USD. If major currencies will continue to appreciate against the USD, it may also pressure up gold and silver. Currently, the Euro/USD is traded moderately up.
U.S. Treasuries / Gold & Silver – January
During January the U.S. 10-year Treasury yield rose by 0.09 per cent point. This upward trend might indicate that the risk appetite in the markets has inclined. This rise in the U.S. LT yields may have also been stem from the recent Federal Reserve report showing consumer credit surged the most in a decade. Furthermore, as seen in the chart below, during December and January there were strong positive correlations among the daily per cent changes of U.S. 10 year notes yield and gold and silver. If the LT U.S. treasury yield will further rise, it may also continue to pressure up gold and silver.
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