The recent FOMC meeting didn’t result in big announcements. This news didn’t lead to big changes in the price of gold and silver. The recent GDP update showed the U.S GDP grew by 1.7%, which was a bit higher than many had expected. Looking forward, will gold and silver resume their downward trend? On today’s agenda: China Manufacturing PMI, Italian and Spanish Manufacturing PMI, Italian and Spanish Manufacturing PMI, ECB Rate Decision, U.S. Jobless Claims and U.S. Manufacturing PMI.
Here is a short outlay for precious metals for Thursday, August 1st:
Gold and Silver Prices Review – August Update
On Wednesday, gold slightly fell by 0.90% to $1,312.40; Silver also decreased by 0.26% to $19.63. During July, gold rose by 7.24%; silver, by 0.91%.
In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of June 28th). The prices of gold and silver declined again last week.
See here the weekly outlook of gold and silver for July 29- August 2.
On Today’s Agenda
China Manufacturing PMI: Back in June 2013 the Manufacturing PMI slipped to 50.1 – i.e. China’s manufacturing sectors is still expanding but at a slightly slower pace; the recent flash PMI report was well below the 50 point market. If in the upcoming report the PMI will also fall below the 50 point mark, it could signal a decline in China’s economic progress;
Italian and Spanish Manufacturing PMI: These reports will pertain to July 2013. During June, the Italy’s index rose to 49.1; Spain’s PMI rose to 50. This means the manufacturing sectors in these countries are slowly improving; these indexes may affect the Euro;
GB Manufacturing PMI: This report will refer to Great Britain’s manufacturing sector in July 2013. In the previous update regarding June 2013 the index increased again to 52.5. This rate gain means the manufacturing sector is growing at a faster pace; this index might affect GB Pound;
BOE Rate Decision & Asset Purchase Plan: Bank of England will come out with its basic rate for August 2013; the MPC will also state of any new changes to its asset purchase pogrom; as of July, BOE kept its rate flat at 0.5% and the asset purchase plan s at £375 billion;
ECB Rate Decision: ECB will announce its cash rate for August. Following the last meeting in which the ECB kept its rate at 0.50%, Draghi’s decision could stir up the Euro market. Some suspect he may keep ECB’s monetary policy with no changes. The recent shift in Draghi’s sentiment with his positive remarks regarding his projections for the future development of the EU economy could further pull up the Euro against leading currencies;
U.S. Jobless Claims Weekly Report: in the previous report the jobless claims increased by 7k to reach 336k; this upcoming weekly report may affect the U.S dollar;
U.S. Manufacturing PMI: This report will refer to July 2013. In June, the index bounced back to 50.9%; this means the manufacturing is growing;
Currencies / Bullion Market – July Update
The Eur/ USD currency pair rose on Wednesday by 0.29% to 1.3302. During July, the Euro/USD rose by 2.24%. Conversely, other currencies such as the Aussie dollar depreciated again yesterday against the U.S dollar by 0.87%. The correlations among gold, Euro and Aussie dollar remained robust, e.g. the correlation between the Euro/USD and gold price is 0.53 during July.
Current Gold and Silver Rates as of August 1st
Gold (short term delivery) is traded at $1,309.60 per t oz. a $3.40 or 0.26% decrease as of 20:54*.
Silver (short term delivery) is at $19.61 per t oz – a 0.12% decrease as of 20:54*.
Here is a reminder of the top events and reports that are scheduled for today and tomorrow (all times GMT):
02:00 – China Manufacturing PMI
08:45 – Italian and Spanish Manufacturing PMI
09:30 – GB Manufacturing PMI
12:00 –BOE Rate Decision & Asset Purchase Plan
12:45 – ECB Rate Decision
13:30 – U.S. Jobless Claims
15:00 – U.S. Manufacturing PMI
08:00 – Spain’s unemployment Change
15:00 – Australia’s PPI
09:30 – GB Construction PMI
13:30 – U.S. Non-Farm Payroll Report
15:00 – U.S Factory Orders
For further reading: