Gold and Silver Prices – Daily Outlook for July 31

Gold and silver changed direction and slipped yesterday after both precious metals had increased a day earlier. This unclear trend started last week. The low volatility of gold and silver might change and start to pick up if the upcoming financial reports and events will stir up the markets. Yesterday the FOMC started its two day meeting. Today, the FOMC will release its statement. If the statement will provide some insight regarding the future steps of the Fed it could affect precious metals prices. On today’s agenda: First U.S GDP 2Q 2013 Estimate, EU CPI Flash Estimate, EU Unemployment Rate,  ADP estimate of U.S. non-farm payroll,  German Retail Sales, Canada’s GDP by Industry, and KOF Economic Barometer.

Here is a short outlay for precious metals for Wednesday, July 31st:

Gold and Silver Prices Review – July Update         

On Tuesday, gold slightly declined by 0.31% to $1,324.30; Silver also decreased by 0.87% to $19.68. During July, gold rose by 8.21%; silver, by 1.18%.

In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of June 28th). The prices of gold and silver changed direction with unclear trend.

Gold and silver outlook 2013  July 31The ratio between the two precious metals rose again on Tuesday to 67.29. During July, the ratio rose by 6.95% as gold moderately out-performed silver.

Gold  silver ratio 2013  July 31See here the weekly outlook of gold and silver for July 29- August 2.

On Today’s Agenda

FOMC Meeting: The FOMC will convene for the fifth time this year and come out with a statement. In the latest meeting the FOMC left its policy unchanged. But in the press conference that followed, Bernanke hinted that the Fed may scale back on its current asst purchase program in the coming months. Later on, however, Bernanke took a step back in his testimony and suggested the FOMC will keep its expanding Monterey policy. This left it unclear when the Fed will scale down its asset purchase program;

The table below shows the FOMC statements and the reaction of gold and silver to this news.

FOMC statment and Gold Silver July 31First U.S GDP 2Q 2013 Estimate: This will be the first estimate of U.S’s second quarter 2013 real GDP growth. In the latest estimate the U.S GDP rose by 1.8% in the first quarter of 2013 (it was revised down). If the growth rate from first quarter of 2013 to the second quarter will further rise, this could affect not only the US dollar but also commodities prices;     

German Retail Sales: In May, retail sales bounced back by 0.8% – higher than many had expected; if this report will show another rise in sales then it might further pull up the Euro;

Canada‘s GDP by Industry: this monthly update shows the changes in major industrial sectors for May 2013. In the latest report regarding April 2013, the real gross domestic product edged up by 0.1%. This report may affect the Canadian dollar, which is strongly correlated with major precious metals prices;

EU CPI Flash Estimate: Based on the previous estimate for June, the annual CPI of 1.4%, which is still much lower than the ECB’s target inflation of 2%. If the inflation will further dwindle, it could indicate the EU economy continues to slowdown;

EU Unemployment Rate: Last month’s report showed that the rate of unemployment inched down to 12.1%, which is still a high rate. If this downward trend will persist, it could positively affect the Euro;

ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the next U.S non-farm payroll developments for July 2013 that will be published on Friday;

Currencies / Bullion Market – July Update

The Eur/ USD currency pair inched up on Tuesday by 0.01% to 1.3263. During July, the Euro/USD rose by 1.94%. Conversely, other currencies such as the Aussie dollar depreciated yesterday against the U.S dollar by 1.58%. The correlations among gold, Euro and Aussie dollar remained strong, e.g. the correlation between the AUD/USD and gold price is 0.31 during July.  

Current Gold and Silver Rates as of July 31st

Gold (short term delivery) is traded at $1,331.50 per t oz. a $6.70 or 0.51% increase as of 08:36*.

Silver (short term delivery) is at $19.84 per t oz – a 0.79% increase as of 08:36*.

(* GMT)

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

Today

07:00 – German Retail Sales

08:00 – KOF Economic Barometer

10:00 – EU CPI Flash Estimate

10:00 – EU Unemployment Rate

13:15 – ADP estimate of U.S. non-farm payroll

13:30 – Canada’s GDP by Industry

13:30 – First U.S GDP 2Q 2013 Estimate

19:00 – FOMC Meeting

Tomorrow

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

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