Gold and Silver – Daily Outlook for October 15th

The prices of gold and silver changed direction and started off the week on a positive note. The uncertainty around the U.S government shutdown and raising the debt ceiling is likely to keep affecting the volatility in the financial markets. Will gold and silver continue their rally today? On today’s agenda: German ZEW economic sentiment, GB CPI, and ECOFIN Summit.

Here is a short overview for bullion for Tuesday, October 15th:

Gold and Silver Prices Recap – October Update    

On Monday, gold increased by 0.66% to $1,276.5; Silver also rose by 0.45% to $21.33. During October, gold decreased by 3.79%; silver, by 1.64%. In the chart below are the normalized rates of bullion for 2013 (normalized to 100 as of September 15th). The prices of gold and silver have slightly declined in the past recent weeks.

Gold and silver Chart 2013  October 15The ratio between the two precious metals slightly rose on Monday to 59.85. During October, the ratio decreased by 2.19% as silver has slightly out-performed gold.

Gold  to silver ratio Chart 2013  October 15The gold and silver futures volumes of trade have declined and reached on Monday 112 thousand and 29 thousand, respectively. For both metals these trade volumes are still low compared to the volume traded in the previous months. If the volume changes direction and rise this week, it could suggest the odds of sudden sharp shift in the prices of gold and silver as a result of high volume will increase.

volume Gold & silver prices 2013  October 15

 

On Today’s Agenda

GB CPI (September 2013): In the previous report referring to August 2013, the CPI slipped to an annual rate of 2.7%; if the inflation rate continues to decline, it may eventually affect the decision of BOE regarding its monetary policy;

German ZEW economic sentiment: The forthcoming report will refer to the ZEW indicator of economic sentiment for Germany for September. In August, the ZEW indicator for Germany rose to 49.6 points; if Germany’s economic sentiment continues to rise, the Euro will plausibly strengthen against other currencies including the US dollar;

ECOFIN Summit: The EU ministers of finance will focus on the economic developments in EU;

Currencies / Precious Metals– October Update

On Monday, the Euro/ USD currency pair slightly rose by 0.13% to 1.3562. During October, the Euro/USD rose by 0.55%. Moreover, other currencies such as the Aussie dollar and yen slightly appreciated yesterday against the U.S dollar by 0.21% and 0.01%, respectively. The correlations among gold, silver and Euro remained weak in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.22 during September/ October. The chart below shows the correlations.

Correlation Gold and EURO USD 2013 October 15

Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):

Today

09:30 – GB CPI (September 2013)

10:00 – German ZEW economic sentiment

All Day – ECOFIN Summit

Tomorrow

09:30 – Great Britain Claimant Count Change

10:00 – Euro Area CPI

13:30 – Canada Manufacturing Sales

For further reading: