Gold, Silver & Copper Seem To Be Doing Their Own Thing

Gold, Silver & Copper Seem To Be Doing Their Own Thing
Gold, Silver & Copper Seem To Be Doing Their Own Thing
The Fed will keep buying $85 billion in mortgage and Treasury securities per month in its ongoing effort to bolster an economy still challenged by federal budget-tightening and weak growth overseas. The  (DX) dollar earlier found support from upbeat economic data showing the U.S. economy grew at an annualized clip of 1.7 percent in the second quarter. Also, the U.S. private sector added 200,000 jobs this month, above forecasts of 180,000.

On Friday, the U.S. Labor Department will release its July nonfarm payrolls report. An upbeat jobs report should buoy the dollar but with the FOMC meeting just days behind the report will not be as crucial to traders for the time being, as it might heighten expectations the Fed will lower the amount of its monthly bond purchases this year. This will have a negative effect on gold.  Gold is trading at 1318.05 gaining almost $6 in the Asian session as traders took advantage of yesterday’s decline to buy up the commodity on the cheap. Gold is expected to ease back down close to the 1300 price level after the ECB meeting later today. Gold prices declined around 0.3 percent in the yesterday’s trading session on the back of mixed global market sentiments. A continuing declining in SPDR gold holdings which stands at 927.35 tons lowest level since February 2009 exerted downside pressure on prices.

Economic data today, might cause some moves in precious and industrial metals, we can expected reports from Europe and Germany in the form of PMI numbers are likely to improve and should limit the losses in the euro. Today, the market would watch for European Central Bank’s and Bank of England’s interest rate decision. This may create volatility in the market. In the North American session, the US will release its ISM manufacturing and price paid numbers, which are expected to improve and should support gains in the dollar and weigh on gold. Gold is expected to remain close to the 1300 price level.

The base metals complex traded on a positive note in the trade as a result of more than forecasted rise in the US GDP data. Further, weakness in the DX after statement from Federal Reserve to continue with its bond buying program acted as a positive factor However, sharp upside in prices was capped as a result of mixed global market sentiments along with mixed LME inventories scenario. Silver is trading at 19.578 in the red this morning as conflicting data from China weighs on the commodity. Copper is moving opposite silver gaining a few points this morning to trade at 3.128. Copper prices traded on a positive note yesterday around 2.4 percent on the back of more than estimated rise in the US GDP growth.

Today we can expect the base metals group to trade on note on the back of rise in China’s manufacturing data along with more than estimates rise in the economic growth of US statement from US Federal Reserve regarding continuation of its bond buying program will support an upside in prices sharp upside in prices will be capped on account of market sentiments along with strength in the DX markets. Eurozone PMI data could have sharp effects on industrial metals later today.

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