As PDAC 2023 gets underway in Toronto, precious metals have enjoyed a much firmer start to the month of March following declines last month (and there are plenty of other events coming up this week for metals traders to keep an eye on), according to TickMill group market analyst James Harte.
Gold and silver have both seen recoveries off the lows to the tune of 2% and 4% respectively, Harte noted.
“One of the key drivers behind the rebound has been the loss of upside momentum in the US dollar which has been a little lacklustre over the last week,” he wrote.
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Looking at the events to come this week, Harte noted that Federal Reserve chairman Jerome Powell begins his semi-annual two-day testimony to the Senate tomorrow.
“The details are likely to err on the hawkish side and might see metals coming off if USD finds any fresh support in response to the comments,” he wrote.
He said the latest US labour market data due Friday would be closely watched ahead of the March FOMC.
“If further strength is seen, this will likely reinforce expectations of a hawkish meeting from the Fed, driving USD higher and weighing on metals,” he said.
“However, should data undershoot forecasts, this might cast more uncertainty, with USD likely to come off a little which would help drive metals further higher.”
Contact the author at emily.jarvie@proactiveinvestors.com
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