RSBL Gold Silver Bars/Coins

Tuesday, 11 December 2012


Last week we saw gold and silver going zigzag and then closing on a lower side by Friday. The prices of gold and silver changed direction and tumbled down on Tuesday and thus resume their downward trend from last week. The ongoing concerns regarding the fiscal cliff are likely to contribute to the volatility of precious metals in the weeks to follow. The prices of gold and silver continue to zigzag as both metals tumbled down. Other leading commodities prices such as crude oil and natural gas also fell on Wednesday.

Gold prices closed under $1,700 for the second consecutive day on the Comex division of the New York Mercantile Exchange Wednesday.

On Tuesday, the price of gold fell by 1.49% to $1,694.4; Silver price also tumbled down by 2.89% to $32.73. During the week, gold declined by 0.92%; silver, by 1.442%.
However the week opened with a positive note. Over the weekend, figures showed that Chinese exports in November increased by 2.9 percent to $179.4 billion, albeit hopes were for 9.6 percent growth in shipments. Imports were unchanged from the previous month at $159.8 billion.

Gold prices hit their highest for a week in Monday morning bullion trading in Europe, with the precious metals sector in a positive frame of mind ahead of this week's US FOMC meeting

The focus of the U S market place this week remained in the ‘fiscal cliff’ tax increases and spending cuts. This fast approaching ‘fiscal cliff’ is the most discussed issue worldwide as it will play an important role for all major markets.

U.S. lawmakers are still jawboning on the matter, with the market place paying less attention to the politicians’ rhetoric. While the market place presently perceives odds are higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff, the overall situation has been a bearish drag on many markets, including the raw commodities and stock markets.

All eyes stay glued on the much awaited FOMC meeting of the Federal Reserve to be held next week on December 11 and 12. This will be the last meeting of 2012 and major topics of discussion include The “Operation Twist” program that comes to an end and the FOMC members have to take a decision on the extension of the bond buying program. There is a belief that the Fed will continue to purchase the US treasuries and launch ‘QE 4’ at this meeting. If this happens then precious metals market tends to remain bullish.

Asian stocks rallied on news that Chinese government officials have said they want to stimulate their economy by implementing more construction projects. Also, China’s purchasing managers index showed further expansion in November. This news is an underlying supportive factor for the metals markets.

Moreover, the upcoming reports including: U.S non-manufacturing PMI could moderately affect commodities markets. If the PMI will rise again it may pull up commodities prices. Australia’s employment report could affect not only the Aussie dollar but also precious metals prices. If this report will show the economy isn’t doing well, it could adversely Australia’s currency. This, in turn, could adversely affect precious metals. Finally, if the Euro and other “risk currencies” will rally against the USD, they are likely to pull up precious metals. 

The Euro/ USD increased again on Tuesday by 0.31% to 1.3094. During the week, the Euro/USD rose by 0.83%. 

The correlations among gold, Euro and Aussie are still strong even thought they have recently weakened: during November and December. Thus, if the Euro and other risk currencies will rise again against the USD, they are likely to pull up gold and silver.

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