Gold and silver started the first week of 2012 with sharp gains but by the end of the week they have changed direction and ended Friday’s trading with light falls. This shift in direction may have been stem, in part, due to the positive U.S. non-farm employment report. Today, the German Industrial Production report will come out and the BOC Business Outlook Survey.
Gold slightly fell on Friday by 0.20% to $1,616.8; silver also declined by 2.09% to reach $28.68. In the chart below are the normalized gold and silver of recent weeks (gold and silver are normalized to December 23rd). During January, gold rose by 3.2% and silver by 2.8%.
U.S Employment Rose by 200k in December
According to the recent U.S. employment report, the U.S. employment sharply grew again during December by 200,000 – the highest gain since September. As I have already analysed in the recent gold monthly forecast report, historically, as the non-farm payrolls inclined gold tended to decrease; this correlation was mostly due to the effect this news had on the USD; the news of the sharp growth in the U.S. labour force during December may have been among the factors to pressure down gold on Friday.
Forex / Gold & Silver – January
The Euro/USD decreased again for the third consecutive day, on Friday it declined by 0.56% to reach 1.2717; other Forex exchange rates such as the Australian dollar also depreciated against the USD. If major currencies will change direction and appreciate against the USD, it may also pressure down gold and silver . Currently, the Euro/USD is traded up.
For further reading: