Gold continue to seek direction: yesterday it ended slipping. The recent rally in the American and European stock markets in the past several days, along with the rise in U.S. Treasury bills yields might suggest that traders have slightly eased their concerns over the Euro Area debt crisis and the growth of the US economy. Today there are many publications that may affect the trade in financial markets; one of the reports is the Philly Fed Manufacturing Index, if this index will show a rise, it could provide some further back-wind to the US stock markets to rise. Consequently it may trade down bullion prices. Today US unemployment claims will also be published, ECB conference in which Trichet will speak, Euro Area and US consumer price indexes reports.
Gold declined yesterday, it fell on Wednesday by 0.20% to $1,826. During September, gold price declined by 0.3%.
On Today’s Agenda:
Philly Fed Manufacturing Index: This report was likely one of the reports factors that affected traded to trade down the US stock markets and trade up gold and silver prices last month as the Philly Fed Manufacturing Index showed sharp drop in the index to -30.7 for August. The current expectations are a slight increase in the index;
Euro Area CPI: In July the annual inflation rate declined to 2.5%, a 0.2 per cent point drop compared with June’s inflation; the expectations in the upcoming CPI report for August 2011 are a slight decline. This news might affect the Euro currency, ECB’s October rate decision;
U.S. unemployment claims: For the week ending on September 3rd, initial claims rose by 2,000 to 414,000 claims; the insured unemployment rate remained unchanged at 3.0% for the week ending on August 27th; this report might affect EURO/USD;
US CPI: This report will show the main changes in the consumer price index during August. In July 2011, the CPI inclined by 0.5% and over the last 12 months by 3.6%.
ECB conference Trichet speaks: following the recent rate decision in which ECB kept the rates unchanged at 1.5%, Trichet will give a speech regarding the economic stability of the Euro Area;
S&P500 / Gold– September update
The S&P500 continue its rally and inclined yesterday by 1.35%; during September, S&P500 fell by 2.48%. The negative of the S&P500 with gold suggest that the recent decline in precious metals’ prices coincides with the rally in the US stock markets.
Gold continue to zigzag with no clear direction during September; the rally of the past few days in the US stock markets, along with the rise in long term US treasury bill yields suggest that traders are slowing their shopping spree for not only long term US treasury bills but also gold. If the Philly Fed Manufacturing Index will be positive, it may provide some back-wind to US stocks and thus further trade down gold. Furthermore, if the US CPI will not rise, it may also cause gold price to fall.
For further reading: Gold and silver prices outlook for September 2011
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.
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