Two key data releases are awaited for the day and yes, it is from US. Both releases—US GDP QoQ and initial jobless claims—are scheduled for around 07.00 PM IST.
The US GDP is forecast to have grown by 2.5% in the first quarter of this year (January-March). If the reading turns out to be a positive surprise i.e. to the upside, it would strengthen US Dollar and thereby weaken bullion prices.
The other data release scheduled for the evening for 7.00 PM IST is US Initial Jobless Claims. The data measures the number of people who have applied for unemployment insurance for the first time during the past week.
If the data released exceeds the forecast of 3,40,000 in numbers, then it would give a fillip to dollar and weaken the precious metals gold and silver.
Besides, the data would also be tracked by US Federal Reserve’s FOMC (Federal Open Market Committee) as the debate on whether or not to continue with QE measures rages on.
The FOMC, responsible for initiating Quantitative Easing measures that involves bond-buying to the tune of $85 billion a month, has tethered the termination of the program to job market recovery and healthy inflation.
Both gold and silver have been plagued by correction and are entrapped in a stalemate condition ever since news arrived that George Soros has liquidated his holdings in SPDR Gold Trust, world’s biggest ETF of gold. While physical demand of gold has picked up recently, it has failed to buoy prices beyond a point.
“Physical buyers have helped to limit declines but they have also become more price-sensitive and tend to stay on the sidelines near $1,400,” said Yang Shandan, a senior trader at Cinda Futures Co., in China to Bloomberg.
Total holdings in ETPs have dipped to the lowest level since June 2011, shrinking by 5.4 percent this month, according to data compiled by Bloomberg.
“Market sentiment remains negative towards gold with non-commercial Comex gold positions at their lowest since December 2008 and ETP outflows showing little sign of slowing down. Net redemptions have hit 94 tons in May thus far (as of Saturday), and once again negative interest is skewed towards the US listed products, with GLD down 58 tons and at its lowest since February 2009.
On a regional basis, US listed products have suffered the largest outflows of 341 tons for the year to date, followed by UK primary listed products at 48 tons and the Swiss listed products at 47 tons. Metal held in trust across the 55 physically backed products we track are now at their lowest since July 2011 with year-to-date outflows of 443 tons, almost the equivalent of the net inflows over the past two years (476 tons).”
Gold on the Comex for delivery on August 13 was seen trading at $1,394.25/oz, a gain of $2.45 or 0.18% as of 10.39 AM IST. Silver on the Comex for delivery on July 13 was seen trading at $22.433/oz, a loss of $0.020 or 0.09%.