Gold and Silver – Daily Outlook for October 11th

The recent speculations around the potential progress in finding ways to end the U.S government shutdown may have contributed to the sharp rally of U.S stock market, US dollar and several commodities such as oil. On the other hand, gold and silver prices didn’t do much as gold slipped, while silver inched up. The coverage of the U.S government shutdown is crowding out other news items. The recent news is that GOP and Obama have started negotiations but no clear indication for progress has been made. In the U.S jobless claims sharply rose by 66k to reach 374k. Will gold and silver resume their downward trend? On today’s agenda: Canada’s Employment Report, China’s Trade Balance, and UoM Consumer Sentiment.

Here is a short review of precious metals for Friday, October 11th:

Gold and Silver Prices Overview – October Update   

On Thursday, gold slipped by 0.78% to $1,296.7; Silver inched up by 0.04% to $21.87. During October, gold decreased by 2.27%; silver rose by 0.85%. In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of September 18th). The prices of gold and silver have slipped in the past several days.

Gold and silver Chart 2013  October 11The ratio between the two precious metals declined on Thursday to 59.29. During October, the ratio decreased by 3.10% as silver has slightly out-performed gold.

Gold  to silver ratio Chart 2013  October 11The gold and silver futures volumes of trade have slightly rose on Thursday to 150 thousand and 40 thousand, respectively. These numbers are still lower than the volume traded a few weeks back. If the volume remains low today, this could suggest the odds of sudden sharp changes in the prices of gold and silver due to low volume will increase. The chart below shows the volume of trading gold and silver futures in the CME during September and October. 

volume Gold & silver prices 2013  October 11

On Today’s Agenda

Canada‘s Employment Report: In the latest employment report for August 2013, unemployment remained inched down to 7.1%; the employment rose by 59.2k during last month. The upcoming report might affect the Canadian dollar and consequently commodities;

China’s Trade Balance: According to the latest monthly report, China’s trade balance rose to a $28.5 billion surplus; if the surplus further rises, it could indicate China’s economy is improving and thus may positively affect commodities;

UoM Consumer Sentiment (preliminary):University of Michigan will publish its preliminary consumer sentiment monthly report; this survey could offer information regarding the latest shifts in U.S consumers’ sentiment; According to the last report, the sentiment index fell to 76.8;

Currencies / Precious Metals– October Update

On Thursday, the Euro/ USD currency pair inched down by 0.03% to 1.352. During October, the Euro/USD rose by 0.24%. Conversely, other currencies such as the Japanese yen and Canadian dollar slightly depreciated yesterday against the U.S dollar by 0.84% and 0.04%, respectively. The correlations among gold, silver and Euro have remained weak in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.29 during September/ October.

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


13:30 – Canada’s Employment Report

Tentative – China’s Trade Balance

14:55 – UoM Consumer Sentiment

For further reading: