Gold and silver resumed their downward trend and declined again yesterday. Their recent fall may have partly been related to positive news from the U.S regarding jobless claims; the number of initial claims slipped by 10k to reach 316k – its lowest level in a long time. This could suggest the labor market is slowly improving, which could have positively affected the USD against other currencies and pull up precious metals prices. Conversely, new orders core durable goods fell by 2% to reach $230.3 billion. Today the U.S markets will be close on account of Thanksgiving. On today’s agenda: German Unemployment Rate, Euro Area Monetary Development, BOE Governor Carney Speaks, Canada’s Current Account, and Germany’s CPI.
Here is a short overview for precious metals for Thursday, November 28th:
Gold and Silver – November Overview
On Wednesday, gold slipped by 0.29% to $1,237.8; Silver fell by 1% to $19.65. During November, gold declined by 6.48%; silver, by 10%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of October 31st). The prices of gold and silver have declined in the past several weeks.
The ratio between the two precious metals increased again on Wednesday to 63. During November, the ratio rose by 3.91% as gold has moderately out-performed silver.
Germany’s CPI (preliminary report):Germany’s CPI is among the factors that affects the ECB’s rate decision. Last month’s report showed a decline in the CPI by 0.2%. If this trends continues, it could indicate the German economy isn’t heating up;
German Unemployment Rate: Last month the unemployment slightly rose by 2k; the developments in the German workforce could affect the Euro/USD currency pair;
Euro Area Monetary Development: In the latest September report, the annual growth rate for M3 slipped to 2.1%; M1 fell to 6.6%. Finally, the annual growth rate of loans to private sector reached -1.4%. This news suggests the EU inflation is falling again as loans continue to contract and the growth rate of M1 and M3 declines. The progress of the EU monetary base is likely to affect future ECB rate decisions;
BOE Governor Carney Speaks: Governor Carney will give a speech in a press regarding the Financial Stability Report, in London;
Canada‘s Current Account: This update presents the changes in the gap between imported and exported goods and services, investment income, and current transfers during the last quarter. In the previous update, the deficit in the current account reached 14.6 billion Canadian dollar – a rise in deficit from the preceding quarter;
Currencies / Precious Metals Correlations – November Update
On Wednesday, the Eur/USD currency pair inched up by 0.05% to 1.3579. During November, the Eur/USD fell by 0.04%. On the other hand, other currencies such as the Aussie dollar and Japanese yen also depreciated yesterday against the U.S dollar by 0.5% and 0.871%, respectively. The correlations among gold, silver and Euro slightly weakened but is still strong, e.g. the correlation between the Euro/USD and gold price is 0.52 during November.
Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):
Today
All day – Germany’s CPI
08:55 – German Unemployment Rate
09:00 – Euro Area Monetary Development
10:30 –BOE Governor Carney Speaks
13:30 – Canada’s Current Account
Tomorrow
All day – Germany’s CPI
08:55 – German Unemployment Rate
09:00 – Euro Area Monetary Development
10:30 –BOE Governor Carney Speaks
13:30 – Canada’s Current Account
For further reading:
- Gold and Silver Outlook for November 2013
- Gold and Silver Weekly Forecast for November 25-29
- Weekly Outlook of Financial Markets for November 25-29
- Gold and Silver Yearly Outlook For 2013
- Is the Golden Era of Gold Over?
- Will Gold Recover from its Recent Fall?