Precious metals took another dive during the first week of July. This fall coincided with the decline in many other financial markets such as oil, U.S stocks etc. The two main events of the week that contributed to fall of bullion rates were the ECB rate decision on Thursday and the U.S employment report. ECB has decided to cut the interest rate by 0.25pp to 0.75% - its lowest rate level. This news adversely affected not only the Euro/USD but also other markets such as stocks and commodities. The following day the U.S non-farm payroll report came out. This time many had anticipated the report will be positive and show a high growth in employment compared to recent months (at least 120k+) but this wasn't the case. Employment expanded by only 80k. This news tends to be negatively correlated with bullion, but this time it adversely affected gold and silver. This may be due to the shift in market sentiment about the possibility of another QE program in the near future. Further, the Euro/USD also declined on Friday and may have also contributed to the decline in major commodities rates including gold, silver and oil. The complete gold and silver weekly recap analysis
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.