The gold and silver market didn’t do much yesterday as both precious metals slipped again. Thus both gold and silver resumed their downward trend. Their recent fall coincided with the depreciation of the Euro and Canadian dollar against the USD. In the U.S non-manufacturing PMI rose again in October to reach 55.4% – a 1 percentage point gain compared to September. This means the non-manufacturing sector in the U.S is growing at a faster pace. In Australia, as expected, RBA left its policy unchanged including the cash rate at 2.5%. The bank voiced its concern for the high Aussie dollar, but has yet to act upon it. The developments in this currency have had a weak correlation in recent weeks. Will gold and silver rally from their recent fall? On today’s agenda: Australian Trade Balance, Great Britain Manufacturing Production, and German Factory Orders.
Here is a short overview for precious metals for Wednesday, November 6th:
Gold and Silver – November Review
On Tuesday, gold slipped by 0.50% to $1,308.1; Silver also fell by 0.29% to $21.64. During November, gold decreased by 1.17%; silver, by 0.9%. In the chart below are the normalized rates of bullion for 2013 (normalized to 100 as of September 30th). The prices of gold and silver slipped during most of the past couple of weeks.
The ratio between the two precious metals slightly fell on Tuesday to 60.46. During November, the ratio decreased by 0.28% as silver has moderately out-performed gold.
The gold and silver futures volumes of trade have increased and reached on Tuesday 120 thousand and 30 thousand, respectively.
On Today’s Agenda
Australian Trade Balance: In the last report the seasonally adjusted balance of goods and services reached an $820 million deficit in August. The export of non-monetary gold increased by $307 million; if gold exports further rise, it might suggest a rise in demand for non-monetary gold (see here latest update);
Great Britain Manufacturing Production: This update will show the annual rate of GB’s manufacturing production as of September; in the previous report regarding August 2013 the index fell by 1.2% (M-2-M); this news may affect the British Pound;
German Factory Orders: The next report will refer to October 2013. In the last update, the factory orders slipped by 0.3% during September;
Currencies / Precious Metals Correlations – November Update
On Tuesday, the Euro/ USD currency pair fell by 0.30% to 1.3474. During November, the Euro/USD declined by 0.81%. Moreover, other currencies such as the Canadian dollar also slightly depreciated by 0.30% yesterday against the U.S dollar. The correlations among gold, silver and Euro remained robust and positive in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.61 during October/November. The chart below shows the linear correlations among the daily percent changes of precious metals and leading currencies pairs.
Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):
Today
02:30 – Australian Trade Balance
09:30 – Great Britain Manufacturing Production
11:00 – German Factory Orders
Tomorrow
02:30 – Australia Employment Update
11:00 – German Industrial Production
12:00 – BOE Rate Decision & Asset Purchase Plan
12:45 – ECB Rate Decision
13:30 – U.S. Jobless Claims
13:30 – First U.S GDP 3Q 2013 Estimate
19:00 – ECB President Speaks
For further reading:
- Gold and Silver Outlook for November 2013
- Gold and Silver Weekly Forecast for November 4-8
- Weekly Outlook of Financial Markets for November 4-8
- Gold and Silver Yearly Outlook For 2013
- Is the Golden Era of Gold Over?