The prices of gold and silver didn’t do much on Wednesday: Gold price inched down while silver rallied after both precious metals had declined on Tuesday. Currently, however, gold and silver are falling down. The silver lining of gold was the strong demand for the physical metal in Asia including China and India. But according to a recent report, gold imports to India declined in August to reach less than one tenth of imports recorded in August 2012. The higher tax imports on gold and weak Rupee against the USD may have contributed to decline in demand. If this trend persists, it could result in ongoing decline in gold price. Will gold and silver keep changing directions on a daily basis until next week’s FOMC meeting? On today’s agenda: Australia Employment Update, ECB Monthly Bulletin, EU Industrial Production, U.S. Jobless Claims, and U.S. Federal Budget Balance.
Here is a short review for precious metals for Thursday, September 12th:
Gold and Silver Prices Recap – September Update
On Wednesday, gold inched down by 0.01% to $1,363.50; Silver increased by 0.67% to $23.13. During September, gold decreased by 2.31%; silver, by 1.47%. In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of August 9th). The prices of gold and silver changed direction and tumbled down yesterday after they had increased last month.
The ratio between the two precious metals rose on Wednesday to 58.94. During September, the ratio decreased by 0.86% as silver has moderately out-performed gold.
The gold and silver futures volumes of trade have declined and reached on Wednesday 108 thousand and 37 thousand, respectively. If the volume rises this week, this could suggest the chances of sudden sharp change in the prices of gold and silver due to high volume will increase.
See here the weekly outlook for gold and silver for September 9-13.
On Today’s Agenda
Australia Employment Update: in the recent report regarding July 2013 the rate of unemployment remained at 5.7%; the number of employed (seasonally adjusted) slightly decreased by 10,200 people. This report could affect the Aussie dollar (see here the recent report);
ECB Monthly Bulletin: This monthly update analyzes the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some perspective on the outlooks of the EU;
EU Industrial Production: This report will refer to August. In the latest update, the industrial production rose by 0.7% during July;
U.S. Jobless Claims: In the last report the jobless claims fell by 9k to reach 323k; the next weekly report may affect the U.S dollar and consequently precious metals;
U.S. Federal Budget Balance: This forthcoming report will refer to August; this report suggests the government debt growth and thus may affect the changes in U.S dollar. In the recent report regarding June the deficit rose by $97.6 billion; if the deficit will continue to expand, it could influence U.S policymakers their decision about next year’s budget reductions;
Currencies / Precious Metals– September Update
On Wednesday, the Euro/ USD currency pair slightly increased again by 0.32% to 1.3311. During the month, so far, the Euro/USD rose by 0.67%. Moreover, other currencies such as the Aussie dollar and Canadian dollar also slightly appreciated yesterday against the U.S dollar by 0.18% and 0.29%, respectively. The correlations among gold, Euro and Aussie dollar slightly weakened in the past several weeks, e.g. the correlation between the Euro/USD and gold price is 0.27 during August-September. The table below shows the correlations between precious metals prices and leading currencies pairs.
Gold (short term delivery) is traded at $1,339.10 per t oz. a $24.7 or 1.81% decrease as of 09:56*.
Silver (short term delivery) is at $22.60 per t oz – a 2.49% decrease as of 09:56*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
02:30 – Australia Employment Update
09:00 – ECB Monthly Bulletin
10:00 – EU Industrial Production
13:30 – U.S. Jobless Claims Weekly Report
19:00 – U.S. Federal Budget Balance
All Day – Euro-Group Summits
All Day – ECOFIN Summit
13:30 –U.S. Retail Sales Report
13:30 – U.S. Producer Price Index
14:55 – UoM Consumer Sentiment
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