Gold and Silver Weekly Outlook for May 14-18

By Lior Cohen
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Gold and silver continued their downward trend during last week and thus are headed (at thus rate) to the worst performing month (so far) in 2012. Last week it was reported that the industrial production output of China and India didn't reach expectations and thus may have adversely affected precious metals rates. The result of the elections in France and Greece raised the concerns that the austerity plans in these countries won't be carried through by the new elected officials. This news may have also been among the factors dragging down not only the Euro but also other currencies and commodities.

Here is a short overview and an outlook for gold and silver between May 14th and 18th:

During last week gold sharply fell by 3.72%; Silver, even more than gold, plummeted on a weekly scale by 5.07%. Furthermore, during last week the SPDR Gold (GLD) also fell by 3.7% and reached on May 11th 153.56 – the lowest price this year (so far).

The video link above about gold and silver shows a broad overview for the main publications, public speeches and events that may influence bullion during May 14th to 18th; the video includes reviewing the main reports, events, decisions and publications that will come out during the days to come. Some of these reports and events include:

Tuesday – Euro Area GDP 1Q2012: According to the previous report, during the fourth quarter of 2011, the Euro Area GDP contracted by 0.3% This news might affect the Euro; the current expectations are of another a low growth rate or even another contraction for the first quarter; if there will be another contraction then technically it will mean Euro Area is in a recession; 

Wednesday – U.S. Housing Starts: this report was historically correlated with gold– as housing starts fell, gold tended to rise the following day (even when controlling to the U.S dollar effect); in the previous report, the adjusted annual rate reached 654,000 in March 2012, a drop of 5.8%;

Wednesday – Minutes of last FOMC Meeting: Following the recent FOMC meeting, in which it was decided to keep the monetary policy unchanged, the market didn't react to this news as bullion only slightly rose. The minutes of the FOMC meeting might bring some insight behind this decision regarding the future steps of the FOMC;

Thursday – Philly Fed Manufacturing Index: In the previous April survey, the growth rate moderately declined to +8.5. If this trend will continue this index may adversely affect not only USD but also gold (the recent Philly Fed review);

Thursday – U.S. Jobless Claims Weekly Update:  the previous report the jobless claims edged down to 367,000; this upcoming weekly update may affect the direction of the U.S dollar and consequently commodities;

In conclusion, I still speculate bullion market will continue to show weakness: if the U.S reports including the core CPI, housing starts, Philly Fed and jobless claims will beat or meet expectations then this might contribute to the weak metals prices. The minutes of the recent FOMC meeting might affect the US dollar and thus also precious metals if it will reveal some unexpected issues. The results of the EU auctions mainly in Italy and Spain could also have a short term effect on the Euro, which is strongly and positively correlated with commodities prices. Finally, The EU related publications may also play a role in the path of the Euro and consequently precious metals.

This gold and silver prices forecast was first presents in Trading NRG

For further reading:

Weekly Outlook for May 14 – 18

Gold and Silver Prices Outlook for May 2012

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