Last week gold and silver slightly decreased despite their modest come back on Friday following another disappointing U.S employment report. The most recent news is coming from France in which Hollande defeated Sarkozy in the elections. This news may affect the euro, which is strongly linked with commodities.
Here is a short overview and an outlook for the week of May 7th to 11th; in this analysis I use fundamental analysis to examine how the upcoming events, decisions and financial reports may affect the direction of gold and consequently also SPDR Gold Trust (GLD).
Gold slightly declined during last week by 1.14%; silver, much like gold, decreased on a weekly scale by 1.88%. Furthermore, during last week the GLD ETF also declined by 1.18% and reached 159.47 on May 4th.
During last week U.S initial jobless claims sharply declined to 365k according to its latest report; this news may have also adversely affected metals via the USD.
The video on gold and silver prices provides a broad outlook for the major news and events that might affect the direction of metals during the week of May 7th to 11th; the video includes reviewing the main reports, events, decisions and news items to be published during the upcoming week. Some of these reports and events include:
Tuesday - Australian Trade Balance: In the previous report, the seasonally adjusted balance of goods and services contracted to a $480 million deficit in February. The export of non-monetary gold sharply rose by $365 million; if gold exports will change direction and fall, it might suggest a drop in demand for non-monetary gold that could explain the recent decline in price of gold;
Thursday - U.S. Jobless Claims Report: In the previous report the jobless claims sharply declined to 365,000; this upcoming weekly report may affect the path of the USD and consequently commodities prices;
Thursday - Bernanke Speech: Following the FOMC meeting of April the Chairman of the Federal Reserve will give a speech regarding the US banking that may affect the direction of forex and commodities markets. The title of the speech is " Banks and Bank Lending: The State of Play ";
Friday - U.S. PPI: In the previous report regarding March this index for finished goods remained unchanged compared with February's rate and rose by 2.8% in the past 12 months; this news might affect the development of gold and silver.
In conclusion, unless there is some breaking news, I speculate metals will continue their moderate downward trend. If the U.S reports, including the trade balance, jobless claims and PPI will beat or meet expectations then this might contribute to pulling down bullion. The results in the elections over the weekend in France could also have a short term adverse effect on the euro, which is strongly and positively linked with bullion prices.
The EU related publications may also play a role in the direction of the euro and consequently also gold and silver prices. Finally, if Bernanke will talk in his upcoming speech about the Fed's plans in the near future it might also have a significant effect on bullion.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.