Gold And Silver Weekly Setup For March 5-9

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Includes: GLD, SLV
by: Lior Cohen

Gold and silver changed direction throughout the week and their volatility has risen compared with their low volatility levels during most of February. The main shift started on Tuesday when silver price rose by 4.5%. This gain didn't seem related to development of gold price as gold only added 0.76% to its value that day. I refereed to the unexpected rally of silver in a recent post; basically I thought it was mostly a speculative move. The following day, Bernanke testified in the House of Representatives: he was encouraged from the positive results the U.S. economy had presents in recent weeks; he also didn't commit to another stimulus plan even though he didn't completely close the door on it. This news however along with the positive U.S. GDP growth rate for Q4 2011 report, signaled to many bullion traders the FOMC won't announce QE3 in the upcoming March meeting. As a result, gold and silver tumbled on Wednesday. Gold and silver bounced back on Thursday, perhaps due to the slight fall in the U.S Manufacturing PMI growth rate.

The video link above provides a broad outlook for gold and silver during the week of March 5th to March 9th; 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:

European Central Bank rate decision: In last month's rate decision the President of the European Central Bank, Mario Draghi kept the rate flat at 1%; as of January, the EU inflation edged down to an annual rate of 2.7%, while the EU unemployment rose to 10.7% and the EU GDP in the fourth quarter fell by 0.3% . This means the EU economy is still not out of the woods. The recent LTRO plan may have been among the reasons for the deprecation of the Euro during last week. If ECB will reduce interest rates it is likely to pressure further down the Euro;

U.S. non-farm employment monthly report: in the recent February report regarding January 2012, the labor market continued to improve as the number of non-farm payroll employment expanded by 243k; the U.S unemployment rate slipped to 8.5%; this report might affect not only the USD, but also gold and silver as I have analyzed in the past (see here my last review on the U.S employment report).

Other reports include: Canada's employment monthly update, U.S. factory orders report, China's consumer price index, Australia's GDP U.S.'s non-manufacturing PMI and U.S. jobless claims weekly update (just to name a few).

Disclosure:

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.