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 didnt
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 didnt
commit to another stimulus plan even though he didnt 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 wont 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.
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