Last week gold and silver prices started off
with little movement but by Thursday both precious metals tumbled down. The FOMC
decision to continue operation twist throughout the rest of 2012 by $267
billion and not to introduce QE3 may have been among the factors to pull down
bullion rates. The Fed also revised down the U.S economic outlook which also
may have dragged down commodities prices. Several other U.S related reports
came out last week and showed the U.S economy isn’t expanding: Philly Fed index declined
in June to its lowest level this year; existing home sales had an
upward trend during last week. U.S jobless claims didn’t change much
and declined by only 2k last week. This upcoming week there are several
publications on the agenda that may affect gold and silver prices. The main
events will revolve around U.S news and pending home sales, GDP for Q1 2012,
Euro Area Monetary Development, jobless claims, core durable goods and Canada’s
GDP by Industry.
Here is a short outlook for June 26th to
June 29th; this includes a short description accompanied with a
fundamental analysis of the main reports, publications, and events that may affect
precious metals market.
Gold price plunged during last week by 3.76%; Silver,
even more than gold, tumbled down on a weekly scale by 7.01%. Furthermore,
during last week the SPDR Gold Shares (GLD) also fell by 3.3% and reached by
June 22nd 152.64.
The Euro declined against the U.S dollar by 0.54% (on a
weekly scale); furthermore, other “risk” currencies such as the Australian
dollar and Canadian dollar also depreciated against the U.S
dollar by 0.11% and 0.28%, respectively. Their sharpest fall came on Thursday.
The decline in the Euro/USD and AUD/USD may have been among the factors to
pull down gold and silver during last week. If these currencies will
continue to trade down, it could further pull bullion rates down.
In conclusion, I speculate precious
metals will continue to dwindle during the upcoming week. The developments in
Europe regarding the debt crisis in Spain and Greece may affect not only the
Euro/USD but also bullion rates. If the Euro will continue to decline this
could also pull down bullion. The upcoming reports regarding the U.S including
the new and pending home sales, GDP for Q1, core durable goods and jobless
claims, could affect not only the USD, but also gold and silver prices: if the U.S reports will continue be negative or
won’t meet expectations it could pull up or at least curb the fall of precious
metals.
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