Gold and silver didn’t do much yesterday, with gold slightly falling and silver increasing. Today, the Euro Area Annual Inflation report will be published, and Canada GDP report for July 2011.
Gold slightly declined on Thursday by 0.05% to $1,617, and silver, on the other hand, moderately increased by 1.29% to $30.52. During September, gold fell by 11.7% and silver decreased by 26.9%.
USD/ Gold & Silver– September Update
The EURO/USD continues to zigzag and finished yesterday slightly up by 0.41% to reach 1.3598; the AUD/USD nearly didn’t change; the USD/CAD increased by 0.24%. If the major currencies will close the day rising, they may affect gold and silver to trade slightly up.
S&P500 / Gold– September Update
The S&P500 increased yesterday by 0.81%; during September the S&P500 declined by 4.80%. The weak negative correlation between the S&P500 and gold (as of September it was -0.155) suggest that the US stock markets’ performance isn’t strongly related to the movement in gold during September. But there is still a chance that if the US stock markets will rise, they might moderately drag gold down, or at least keep it low.
On Today’s Agenda:
Euro Area Annual Inflation: the inflation in Euro Area remained unchanged in August with an annual inflation rate of 2.5%; if the upcoming flash estimate won’t show an increase in the inflation rate, it may affect the EURO/USD and consequently affect gold and silver;
Canada GDP: This report will present the changes in major industrial sectors for July 2011. In the previous report regarding June 2011, the real gross domestic product slightly inclined by 0.2%,. This report could affect the strength of CAD and consequently affect gold and silver (for the full previous report).
Gold and Silver Outlook:
Gold and silver didn’t do much yesterday, but in the past few days they have both shed an ample amount off their value. Some may have attributed to the FOMC decision from last week, other also consider last week’s CME margin hike on gold and silver contracts. In any case, these events and perhaps other along the way (e.g. the deliberations of European policymakers over debt bailout program the recent reports on Euro and US economies that show a slowdown in economic activity during last month) all have contributed to change the direction of gold and salver during the second half of September. For the last day of the month, probably there won’t be many changes, and I speculate there will be a slight increase in gold and silver to close the month of September and the week.
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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.