Gold and silver resumed their downward trend and slowly descended during last week. Janet Yellen’s recent testimony may have dragged down the prices of gold and silver as she reiterated her view that the U.S economy is on the right track towards improvement. For the week of May 12th to May 16th, several reports and decisions will take place including: Janet Yellen’s speech, U.S retail sales, China’s industrial production, U.S industrial production, EU GDP for Q1, U.S housing starts and building permits, U.S CPI, and Philly Fed index.
The price of gold slipped by 1.17% last week; conversely, the average price reached $1,296.42/t. oz which was 0.08% above than last week’s average rate. Gold ended the week at $1,287.6 /t. oz.
Silver price also declined by 2.17%; the average weekly rate was $19.34/t oz, which was 0.09% below last week’s rate.
Herein is a short overview showing the main decisions, reports and events that will come to fruition during May 12th to 16th and may affect the bullion market.
Let’s breakdown the main events, speeches and reports by leading economies:
U.S
This week, several important U.S economic reports will be released and show the progress of the economy. Notably, retail sales, CPI, PPI, Philly fed survey, Federal budget balance weekly update on jobless claims, building permits and housing starts. If these reports show additional signs of progress, which will also exceed the market’s expectations, then they could adversely affect the prices of gold and silver. Moreover, the Chair of the FOMC, Janet Yellen, will give another speech this week regarding small business and the U.S economy. This speech could stir up the market if she surprises the markets with her remarks.
During last week, the U.S dollar appreciated against the Euro but dropped again other currencies including yen and Canadian dollar. If the U.S dollar resumes its upward trend against leading currencies; this could further pressure down gold and silver.
Europe
This week, several reports will be released during the week including: EU GDP for Q1, German economic sentiment, EU CPI, and Great Britain Claimant Count Change. These reports could affect the Euro and British pound, which could partly affect the gold and silver.
India and China
During last week, the Indian Rupee slightly rose against the US dollar. If the rupee continues to appreciate, it could augment the demand for gold and silver in India.
In China, the industrial production and new loans reports will be released this week; they could shed some light on China’s growth.
Finally, during last week, gold holdings of SPDR gold trust ETF remained unchanged The ETF is still down by 2.3% since the beginning 2014. Gold holdings were at 782.852 tons by the end of last week. If the ETF’s gold holdings resumes its downward trend, this may signal the demand for gold as an investment is softening.
Takeaway
The main events of the week will revolve around the U.S publications mainly CPI, Philly fed, and housing data. Further, Yellen’s speech could also play a role in moving the financial markets if the speech offers any new insights. Based on the upcoming news and recent developments, I guess gold and silver may continue to slowly descend this week. In any case, the volatility of gold and silver is likely to further fall.
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