First week of February is U.S. data week. High impact events could change the commodity price direction.
Let see what we can expect from this data and how much they can affect crude oil and metal prices as U.S. is the largest crude importer and second largest industrial metals importer.
ISM Manufacturing Index has continuously shown expansion since July, 13. This time too we may see expansion in manufacturing industry but below previous level of 57.0. Fall in durable and core durable goods likely to have negative impact on this index. Durable Goods orders fell to 4 months low at -4.3% while core durable goods order fell to 15 months low at -1.6%. Fall in Manufacturing PMI may reduce prices of industrial metals as well as crude oil.
ISM Non Manufacturing PMI may continue expansion. In GDP data services have increased by 2.5% in last quarter of 2013 from third quarter that may support service industry progress. Export of Goods and Services has risen to 11.4% compare to 3rd quarter increase of 3.9%. Strong dollar is expected to increase investment in equity and bond market and fall prices of precious metals. Gold may face continuous selling on rising demand for U.S. treasury bonds.
Trade Balance may improve further on increasing export and falling import. Import has increased by 0.9% in last quarter compare to increase of 2.4% in 3rd quarter. This may fuel dollar index and further weaken precious metals.
Non Farm payroll will remain crucial among all other data releases. How much jobs manufacturing and service industries add that may give glimpses of employment change. Same data will show change in Unemployment Rate. As mentioned earlier if manufacturing and service indices fall and file contraction in new employment then it will be a positive sign for bullion buyers. Weak dollar may also support other metal and crude oil prices.