Gold and silver continued their rally and inclined yesterday; this rally was probably stem, in part, by the news from ECB to cut interest rates and the speculation that Greek President Papandreou might cancel the referendum. Today, G20 meeting will continue, there will be a voting in the Greek parliament, the U.S. Non-farm Employment report will be published (update: US labour grew by 80k), along with the Canadian Employment Report (update: labour declined by 54k), and the German Factory orders report.
Gold sharply rose on Thursday by 2.05% to $1,765.1; silver also increased by 1.64% to $34.50.
ECB Cut Interest Rate to 1.25%
Yesterday, Mario Draghi President of the European Central Bank announced he will slash the ECB interest rate by 0.25 per cent points from 1.5% to 1.25%. Draghi also stated he expects the Euro Area annual inflation rate to remain above the 2% target of ECB in the months to come, but he doesn’t expect that the rate reduction will increase inflation pressures.
On Today’s Agenda:
U.S. Non-farm Employment Report
Today the non-farm employment report will be published; in the recent October report for September, the number of non-farm payroll employment rose by 103k; the U.S unemployment remained at 9.1%; the last report showed some improvement from the previous months, and may have curbed some of the rally of gold and silver during the first few days of October (as indicated in the table below). According to ADP the employment grew by 110k in October; if this estimate is valid, it may curb the recent rally in gold and silver (see my last review on the U.S labour report).
Gold and Silver Prices:
The rally of gold and silver in recent days might come to a short halt if the US labour report will be positive; on the other hand, if the Greek parliament and President will eventually cancel the referendum it might push up stock and Forex markets and thus also help push up gold and silver.
For further reading: Did the Liquidity Trap Cause the Hike in Gold Price?
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG