Gold and Silver – Daily Outlook for November 8th

The prices gold and silver changed direction again and slipped on Thursday. Their recent fall coincided with the depreciation of the Euro against the USD. The decision of ECB to cut down the cash rate to 0.25% – its lowest level, may have contributed to the drop in the Euro. In the U.S, the GDP growth estimate for the third quarter came out; the GDP grew by an annual rate of 2.8% – higher than expected. This news may have also pulled up the USD and as a result pressured down the prices of gold and silver. Finally, jobless claims fell again by 9k to reach 336k.  Will gold and silver change direction and rally? On today’s agenda: U.S. Non-Farm Payroll Report, U.S Personal spending, China New Loans, China’s CPI, RBA Monetary Policy Statement, Canada’s Employment Report, China’s Trade Balance, UoM Consumer Sentiment, Bernanke’s Speech, and China’s Industrial Production.

Here is a short overview for precious metals for Friday, November 8th:

Gold and Silver – November Review                         

On Thursday, gold fell by 0.7% to $1,308.5; Silver also decreased by 0.41% to $21.66. During November, gold decreased by 1.14%; silver, by 0.80%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of October 15th). The prices of gold and silver moved in an unclear trend in the past week.

Gold and silver Chart 2013  November 8The ratio between the two precious metals slightly decreased on Thursday to 60.42. During November, the ratio decreased by 0.34% as silver has moderately out-performed gold.

Gold  to silver ratio Chart 2013  November 8On Today’s Agenda

U.S. Non-Farm Payroll Report: In the previous employment report for September 2013, the labor market slightly expanded: The number of non-farm payroll employment rose by 148k – lower than the number many had anticipated; the U.S unemployment rate edged down to 7.2%; the upcoming employment report could show a drop in jobs or even a contraction, due to the government shutdown. If the employment doesn’t reach 150 thousand (in additional jobs), this may pressure up gold and silver;

UoM Consumer Sentiment (preliminary):University of Michigan will publish its preliminary consumer sentiment monthly update; this survey could offer information regarding the latest developments in U.S consumers’ sentiment; According to the recent report, the sentiment index declined to 75.2;

Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give speech in a discussion panel. The title of his speech is “The Crisis as a Classic Financial Panic”. The speech will take place at the International Monetary Fund Conference: Fourteenth Jacques Polak Annual Research Conference, Washington, D.C. If Bernanke refers in his speech to the Fed’s policy, this speech may stir up the financial markets;

U.S Personal spending: This monthly report will refer to the changes in income and outlays in the U.S during September; in the last report regarding August the personal income slightly rose by 0.3%;

China’s Trade Balance: Based on the recent monthly report, China’s trade balance fell to a $15.2 billion surplus; if the surplus further falls, it could indicate China’s economy isn’t improving and thus may adversely affect precious metals;

China New Loans: This report refers to the developments in China’s new loans. Based on the previous report, the total loans rose again; this report is another indicator for China’s economic growth;

China‘s CPI: Last month, China’s inflation rate slightly fell to an annual rate of 3.1%, which is still far off (below) Bank of China’s target inflation. The lower than targeted inflation is another indication for China’s economic slowdown;

China’s Industrial Production: Based on the last month’s report, China industrial production fell to an annual rate of 10.2%; if the growth rate further falls, it may suggest China’s economy isn’t progressing any faster;

RBA – Monetary Policy Statement: The RBA will publish its quarterly report regarding the Bank’s monetary policy;

Canada‘s Employment Report: In the latest employment update for September 2013, unemployment remained inched down to 6.9%; the employment rose by 11.9k during last month;

Currencies / Precious Metals Correlations – November Update

On Thursday, the Euro/ USD currency pair fell by 0.70% to 1.3419. During November, the Euro/USD declined by 1.21%. Moreover, other currencies such as the Aussie dollar also depreciated by 0.76% yesterday against the U.S dollar. The correlations among gold, silver and Euro got stronger in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.75 during October/November.

Here is a reminder of the main events and publications that are scheduled for today (all times GMT):


01:30 – Reserve Bank of Australia – Monetary Policy Statement

13:30 – Canada’s Employment Report

13:30 – U.S. Non-Farm Payroll Report

13:30 – U.S Personal spending

Tentative – China’s Trade Balance

Tentative – China New Loans

Tentative – China’s CPI

14:55 – UoM Consumer Sentiment

20:30 – Bernanke’s Speech

05:30 – China’s Industrial Production

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