Gold and Silver Prices Weekly Outlook for August 20-24

During last week gold and silver prices didn’t do much as gold slipped while silver edged up. There were several reports that were published but none of them seem to have had a substantial impact on precious metals: the Philly Fed Index rose but was still negative, i.e. the manufacturing conditions haven’t improved. U.S housing starts fell during July. The American core CPI rose by 0.1% during July; the U.S PPI excluding food and energy, by 0.4%; Euro Area GDP contracted by 0.2% during Q2 2012; U.S retail sales increased by 0.8%, and finally U.S. jobless claims rose by 2k to 366k.

Here is a short forecast for August 20th to 24th; this includes a fundamental analysis of the main publications and speeches that may affect precious metals markets including: U.S core durable goods, minutes of FOMC meeting, U.S new and existing home sales, Euro Zone and China’s flash manufacturing PMI, RBA’S President Speech.    

The price of gold slipped during last week by 0.21%; further, during said time the average rate reached $1,611.98 /t. Gold finished at $1,619.4 /t. oz. Silver, on the other hand, edged up on a weekly scale by 0.09%, while its average rate slipped by 0.15% to $28.00/t oz. Furthermore, during last week the SPDR Gold Shares (GLD) also edged down by 0.3% and settled by August 17th at 156.72.

The Euro rose against the U.S dollar by 0.37% (on a weekly scale); alternatively, other “risk” currencies such as the Australian dollar depreciated against the U.S dollar by 1.49%. The decline of the AUD and the rise of the Euro may have contributed to the mixed trend of bullion rates. The correlation between the AUD/USD and precious metals remains strong: during the month the correlation between Euro/USD and gold reached 0.54; between Euro/USD and gold, 0.49. This means if the AUD and Euro will trade up it could pull up gold and silver during the upcoming week.

In the video below there is a broad overview of the main publications, speeches and reports that may affect gold and silver prices between August 20th and August 24th. These include the above-mentioned news items such as: Japan’s trade balance, U.S core durable goods, minutes of FOMC meeting, U.S new and existing home sales, Euro Zone and China’s flash manufacturing PMI, RBA’S President speech and U.S. jobless claims (just to name a few).

In conclusion, I guess gold and silver prices will continue to move in their respective range they have been trading in the past several weeks. These precious metals might resume their general downward trend especially if the minutes of the FOMC won’t offer any clues to the future steps of the FOMC. There are several other reports that could affect precious metals rates to move in different directions: if the U.S housing market – the new and existing home sales reports– will continue to show little progress this could positively affect bullion rates; if the manufacturing PMI reports for China and EU will remain below the 50 mark, this could adversely affect commodities prices. There are renewed guesses that EU and China will issue, in the near future, a stimulus plan.  If there will be actual news to support these guesses, then this may result in commodities trading up. Finally, if the Euro, Aussie dollar and other exchange rates will resume their rally against the USD, this trend could trade up precious metals.

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