Gold and silver started off the week with little movement as gold edged down while silver slightly rose. The recent new from Cyprus didn’t seem to affect much the demand for safe haven investments. Bernanke gave a speech yesterday in London but his speech also didn’t stir up the financial markets. Will gold and silver pick up? Currently, gold and silver prices are edging down. On today’s agenda: Governor Stevens speaks, U.S Core Durable Goods, U.S Consumer Confidence, and U.S New Home Sales.
Here is a short outlook for precious metals for Tuesday, March 26th:
Precious Metals – March Update
On Monday, the rate of gold fell by 0.48% to $1,606.1; Silver also fell by 1.76% to $28.67. During March, gold rose by 1.8%; silver, by 0.97%.
In the chart below are the normalized rates of gold and silver during March (normalized to 100 as of February 28th). The prices of gold and silver shifted in an unclear trend in recent days.
The ratio between the two precious metals fell on Monday to 55.73. During the month, the ratio edged up by 0.3% as gold slightly out-performed silver.
On Today’s Agenda
Governor Stevens speaks: Reserve Bank of Australia Governor will speak at the Australian Securities and Investments Commission Annual Forum; he might refer to the recent RBA monetary policy meeting, in which the RBA kept its policy unchanged;
U.S. New Home Sales: in the latest report (opens pdf), the sales of new homes spiked to an annual rate of 437,000 – a 15.6% gain (month over month); if the number of home sales will continue to rally, it may indicate a sign of recovery in the U.S real estate market;
U.S Core Durable Goods: As of January, new orders of manufactured durable goods decreased to $217.00 billion; if this report will present another drop in new orders then it could drag down not only the USD but also commodities rates;
U.S Consumer Confidence: based to the latest monthly report, the consumer confidence index spiked in January to 69.6 (M-o-M). The current expectations are that the February index may continue to rise; this report might affect precious metals;
Currencies / Bullion Market – March Update
The Euro/ USD changed direction and tumbled down on Monday by 1.06% to 1.2851. During the month, the Euro/USD decreased by 1.66%. Conversely, many other currencies such as the Aussie dollar and Japanese yen appreciated yesterday against the U.S dollar by 0.21% and 0.42%, respectively. The mixed trend in major currencies against the U.S dollar may have contributed to the mixed trend of precious metals prices. The correlations among gold, Japanese yen and Aussie dollar remained mid-weak during the month: during March, the linear correlation between gold and USD/Yen was -0.3 (daily percent changes); the linear correlation between the gold and AUD/USD was 0.22 (daily percent changes). These weak correlations suggest the recent shifts in precious metals markets had little to do with the daily changes in the foreign exchange markets. The recent developments regarding the Cyprus bailout may have contributed to the tumble of the Euro. Despite the agreement that was struck between the EU and Cyprus, the mistrust of Cyprus deposit holders persists. Coming Thursday when the Banks will open, we might see a bank run in Cyprus.
Current Gold and Silver Rates as of March 26th
Gold (short term delivery) is traded at $1,604.5 per t oz. a $1.8 or 0.11% decrease as of 01:48*.
Silver (short term delivery) is at $28.8 per t oz – a 0.07% decrease as of 01:48*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
04:45 –Governor Stevens speaks
13:30 – U.S Core Durable Goods
15:00 – U.S Consumer Confidence
15:00 – U.S. New Home Sales
07:00 – German Consumer Climate
08:00 – KOF Economic Barometer
09:30 – GB Current Account
13:00 – Canada’s core CPI
15:00 – U.S. Pending Home Sales
For further reading: