The prices gold and silver rose again for the second consecutive day. The rally was plausibly fueled by the recent appreciation of the Euro against the USD. The ECB left its interest rate unchanged at 0.75%. Mario Draghi stated (again) that ECB is ready to start its bond purchase program that will help Spain. This news may have contributed to the recent recovery of the Euro. U.S jobless claims rose by 4k to reach 367k. On today's agenda include: U.S. Non-Farm Payroll and Canada's Employment Report.
Minutes of FOMC Meeting
The minutes of the FOMC meeting, which was held back in September 13-14 came out yesterday. The report showed the FOMC is considering continuing with its current monetary expansion plan even if the U.S economy will recover:
"To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens."
On Today's Agenda
U.S. Non-Farm Payroll Report: according the recent report U.S employment expanded by 114k. The rate of unemployment declined to 7.8%. In August, the labor market expanded by a lower than expected rate: the number of non-farm payroll employment rose by 96k; the U.S unemployment rate slipped to 8.1%; this report may affect not only the U.S dollar, but also commodities. The table below shows the relation among the prices of gold, silver and USD/YEN with the labor report. In the last report the prices of silver and gold hiked. My guess is that if the upcoming report will be positive and rise above the 120k mark, it is likely to pull up precious metals rates.
Canada's Employment Report: In the recent employment report for August 2012, unemployment remained at 7.3%; the employment rose by 34k during the month. The upcoming report might affect the Canadian dollar and consequently the prices of bullion;
The rise in the Euro and other "risk currencies" may have also helped pull up precious metals. The ongoing speculation around Spain's next move could affect not only the Euro, but also bullion rates. Today's publication of the U.S. jobs report could positively affect the USD, stocks and commodities if the report will show growth in jobs of above 120k. Finally, if the Euro and CAD will rise, then they could also rally precious metals.
For further reading: Gold and Silver Outlook for October
By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG
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