Gold and silver decreased on Monday after the price of silver rallied on Friday. Last week’s developments including: the publication of the U.S employment report, the FOMC meeting, and ECB rate decision didn’t stir up precious metals markets. This week is likely to result in low volatility in the bullion market. Will gold and silver continue to fall? On today’s agenda: Australian Trade Balance, American Trade Balance, Reserve Bank of Australia cash rate decision, Canadian Trade Balance, and Great Britain Manufacturing Production.
Here is a short outlay for precious metals for Tuesday, August 6th:
Gold and Silver Prices Review – August Update
On Monday, gold slightly declined by 0.62% to $1,302.10; Silver also decreased by 0.96% to $19.72. During August, gold slipped by 0.78%; silver slightly increased by 0.47%.
In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of July 10th). The prices of gold and silver have rallied in recent weeks.
See here the weekly projection of gold and silver for August 5-9.
The gold and silver futures volumes of trade have declined in the past several days and reached on Monday 106 thousand and 36 thousand, respectively. These numbers are lower than the volume traded in recent weeks back. If the volume will continue to fall this week, this could suggest the odds of sudden sharp shifts in the prices of gold and silver due to low volume will diminish. The chart below shows the volume of trading gold and silver futures in the CME in recent weeks.
On Today’s Agenda
Reserve Bank of Australia – Cash Rate Statement: In the latest rate decision of RBA it left the cash rate at 2.75% – its lowest level in years, which contributed to decline of the Aussie dollar. The current expectations are that RBA will cut the interest rate again by 0.25 percentage points, which is likely to keep the Aussie weak against leading currencies;
American Trade Balance: Based on the recent American trade balance update regarding May the goods and services deficit expanded to $45 billion;
Australian Trade Balance: In the last update, regarding May, the seasonally adjusted balance of goods and services rose to a $670 million surplus. The export of non-monetary gold increased by $135 million; if the gold exports will continue to increase in June, it might suggest a rise in demand for non-monetary gold (see here latest update);
Great Britain Manufacturing Production: This update will present the annual rate of GB’s manufacturing production as of June; in the previous report regarding May 2013 the index fell by 0.8% (M-2-M);
Canadian Trade Balance: In the previous report regarding May 2013, exports slipped to 1.6% and imports decreased by 3.2%; as a result, the trade balance’s deficit fell from $951 million in April to $303 million in May;
Currencies / Bullion Market – August Update
The Euro/ USD currency pair inched down on Monday by 0.14% to 1.3258. During August, the Euro/USD fell by 0.33%. Conversely, other currencies such as the Aussie dollar appreciated yesterday against the U.S dollar by 0.27%. 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-August.
Current Gold and Silver Rates as of August 6th
Gold (short term delivery) is traded at $1,290.70 per t oz. a $11.70 or 0.90% decrease as of 07:55*.
Silver (short term delivery) is at $19.59 per t oz – a 0.66% decrease as of 07:55*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
02:30 – Australian Trade Balance
05:30 – Reserve Bank of Australia – Cash Rate Statement
09:30 – Great Britain Manufacturing Production
13:30 –American Trade Balance
13:30 – Canadian Trade Balance
10:30 –BOE Inflation Report
10:30 –BOE Governor Carney Speaks
11:00 – German Industrial Production
15:00 – Canada’s Ivey PMI
Tentative – U.S 10 Year Bond Auction
Tentative – Japan’s monetary policy meeting and press conference
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