Following the sharp fall in the past several days, the prices of gold and silver recovered yesterday from their downward trend and sharply rose. Their recent recovery may have partly been related to Bernanke’s speech about the Fed’s future policy on keeping the inflation from further falling below the 2% annual rate. Precious metals’ rally didn’t coincide with the depreciation of leading currencies against the USD. In the U.S, jobless claims slightly fell by 2k to reach 339k. The American trade balance widened during September due to higher imports and lower exports, which suggest the U.S economy hasn’t improved during the month. This news may have contributed to the recent recovery of gold and silver. Will gold and silver change direction? On today’s agenda: Euro Area CPI, ECOFIN Summit, Canada Manufacturing Sales and U.S Industrial Production.
Here is a short review of bullion prices for Friday, November 15th:
Gold and Silver – November Review
On Thursday, gold rallied by 1.44% to $1,286.3; Silver, by 1.37% to $20.72. During November, gold decreased by 2.82%; silver, by 5.08%. In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of October 31st). The prices of gold and silver have declined during most of November.
The ratio between the two precious metals inched up on Thursday to 62.07. During November, the ratio increased by 2.39% as silver has moderately under-performed gold.
On Today’s Agenda
U.S Industrial Production: This report will present the monthly changes in the industrial production as of October; as of September, the production increased by 0.6%; this report may affect the USD currency;
ECOFIN Summit: The EU ministers of finance will convene and talk about the recent economic developments in EU;
Euro Area CPI: Based on the recent update, the annual CPI declined to 1.1%, which is well below ECB’s target inflation; if the inflation continues to fall, it could affect ECB’s monetary policy;
Canada Manufacturing Sales: This report will pertain to the manufacturing sales in Canada as of September. It may affect the USD/CAD currencies pair, which is correlated with commodities. In the previous report regarding August 2013, manufacturing sales fell by 0.2%;
Currencies / Precious Metals Correlations – November Update
On Thursday, the Euro/ USD currency pair slipped by 0.20% to 1.3461. During November, the Euro/USD fell by 0.91%. Moreover, other currencies such as the Japanese yen and Aussie dollar also depreciated yesterday against the U.S dollar by 0.78% and 0.47%, respectively. The correlations among gold, silver and Euro remained robust in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.56 during October/November.
Here is a reminder of the main events and publications that are scheduled for today (all times GMT):
Today
All Day – ECOFIN Summit
10:00 – Euro Area CPI
13:30 – Canada Manufacturing Sales
14:15 –U.S Industrial Production
For further reading:
- Weekly Outlook of Financial Markets for November 11-15
- Will Gold Recover from its Recent Fall?
- Gold and Silver Outlook for November 2013
- Gold and Silver Weekly Forecast for November 11-15
- Gold and Silver Yearly Outlook For 2013