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Precious Metals Fundamental Analysis – November 10, 2015 – Forecast – Gold, Silver & Platinum

By:
Barry Norman
Updated: Nov 9, 2015, 12:14 UTC

Analysis and Recommendations: Gold gained $5.40 as traders bought up the cheap metal after its decline on a shift in outlook for the US after a stellar

Gold Rises upon Market Uncertainty

gold monday bns
Analysis and Recommendations:

Gold gained $5.40 as traders bought up the cheap metal after its decline on a shift in outlook for the US after a stellar jobs report on Friday. Gold remains under the $1100 price at 1093.10. Silver is up 34 points at 14.725 and Platinum is down $5.20 diverging from other precious metals to trade at 934.80.

Gold is just about $10 away from a 5-1/2-year low hit in July.  Employers outside the farming sector added 271,000 jobs in October, the most in 10 months, and the jobless rate fell to a 7-1/2-year low of 5 percent. Economists had forecast nonfarm payrolls increasing 180,000 last month and the unemployment rate remaining at 5.1 percent.

Policymakers at the U.S. central bank welcomed the data and investors increased bets that the first rate increase in nearly a decade will come next month, sending the dollar higher. Markets shifted to show a 70 percent probability of a December rate hike, up from 58 percent before the report.  

Gold fell as markets believed higher rates would hurt demand for the non-yielding asset.  Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 0.40 percent to 669.09 tonnes on Friday, the lowest in nearly three months, as investor’s exited bullion.

Hedge funds and money managers cut a bullish stance in COMEX gold as they trimmed a silver net long position from a record high in the week to Nov. 3, U.S. Commodity Futures Trading Commission data showed on Friday.

The sell-off in gold has continued for three weeks now, with the major trigger for this fall being continued strength in the dollar. The sell-off intensified last week after strong job numbers in the US surprised markets. Gold prices tumbled over 4 per cent last week to close at $1,089.8 per ounce. All the data points on US jobs pointed to a strong economy. US non-farm payrolls increased by 2,71,000 in October as against the market expectation for an increase of 1,80,000 jobs.

The unemployment rate fell to 5 per cent from 5.1 per cent. The data helped the dollar index (99.17) to breach an important resistance at 98 and surge 2.3 per cent higher for the week, as the data has increased chances for a December rate hike from the US Federal Reserve.

Apart from the falling unemployment rate, one key indicator which has strengthened the case for a rate hike in December is the average hourly earnings of US workers — a major concern cited by the Federal Reserve.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  EUR

 

German Trade Balance (Sep)

 

20.0B

19.6B

 

 

  EUR

 

Eurogroup Meetings  

 

 

 

 

 

  USD

 

FOMC Member Rosengren Speaks  

 

       

 

gold

Upcoming Economic Events that you should be monitoring:

Tuesday, November10, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  JPY

 

Current Account n.s.a. (Sep)

 

2.235T

1.653T

 

 

  GBP

 

BRC Retail Sales Monitor (YoY) (Oct)

 

 

2.6%

 

 

  AUD

 

Home Loans (MoM) (Sep)

 

 

2.9%

 

 

  AUD

 

NAB Business Confidence (Oct)

 

 

5

 

 

  CNY

 

CPI (MoM) (Oct)

 

-0.2%

0.1%

 

 

  CNY

 

CPI (YoY) (Oct)

 

1.5%

1.6%

 

 

  CNY

 

PPI (YoY) (Oct)

 

-5.8%

-5.9%

 

 

  EUR

 

EU Finance Ministers Meeting  

 

 

 

 

 

  USD

 

Export Price Index (MoM) (Oct)

 

-0.2%

-0.7%

 

 

  USD

 

Import Price Index (MoM) (Oct)

 

-0.1%

-0.1%

   

Government Bond Auctions

Date Time Country

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction

 

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