Gold and Silver Prices Outlook for May 6 -10

Gold and silver slightly rose during last week. Their rally coincided with the recovery of other commodities such as oil and leading “risk related currencies” such as Euro and Aussie dollar against the USD.  Last week, the FOMC and ECB decided on any changes to their respective monetary policy. The ECB decided to cut its interest rate by 0.25pp to 0.5%. The FOMC kept its policy unchanged including its $85 billion a month asset purchase program. 

Nonetheless, the speculation around the next move of the Fed may have pulled bullion rates into different directions. The recent non-farm payroll report didn’t seem to stir up much bullion market despite its better than expected gain in employment. 

Will gold and silver continue to recover this upcoming week?  

Chinese Mothers Beat Wall Street To Force Gold Price Rebound

Attempts by Wall Street funds to drive down bullion value through short selling thwarted by Asian mothers swooping in to buy for weddings.

Enoch Yiu and Daniel Ren in Shanghai

Gold prices are rising again as Asian mothers take advantage of the recent weakness in the price to buy jewellery. 

Chinese mothers have beaten Wall Street hedge fund managers in forcing a turnaround in the price of gold after it dropped last month.

Taking advantage of the steepest drop in three decades, they have shored up prices by splashing out on gold for their daughters' weddings in the past couple of weeks, foiling the plan of finance gurus who have been short selling the precious metal in the hope of pushing it lower.

Gold Bull Run Seen Over as Bear Drop Frays Faithful

Gold’s longest winning streak in at least nine decades is poised to end as diminishing trust in the metal’s ability to preserve value spurred a majority of analysts to predict the first annual retreat since 2000.

Prices will close the year at $1,550 an ounce, 7.5 percent less than at the end of 2012 and the biggest drop since 1997, according to the median of 38 estimates compiled by Bloomberg. Investors are selling bullion held through exchange-traded products at the fastest pace on record, hedge funds accumulated their second-biggest bearish bet ever and futures had their biggest two-day drop in 33 years last month.

Gold futures spike to session highs after Draghi, ECB rate cut

Gold futures rose sharply on Thursday, hitting the highest level of the session as the European Central Bank cut interest rates to a record low in May.

Prices also remained supported after the Federal Reserve re-affirmed its commitment to leave interest rates unchanged near zero and continue buying USD85 billion in debt each month on Wednesday.

Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

Silver and Gold Prices Both Fulfilled Yesterday's Suspicions by Dropping Today

Silver and GOLD PRICES both fulfilled yesterday's suspicions by dropping today. Gold slumped $25.90 to $1,446.30 while the SILVER PRICE backslid 83.9 cents to 2330.5c.