Gold and silver prices tumbled down again during last week. Will gold and silver continue to trade down this week? As I have stated in the recent precious metals weekly outlook, several publications, events and speeches will take place during the forthcoming week that may affect bullion prices. These items include: minutes of the recent FOMC meeting, Bernanke’s testimony in Congress, U.S new and existing home sales, U.S core durable goods, China and EU flash manufacturing PMI surveys, Canada’s retail sales, Bank of Japan’s monetary policy meeting, and U.S jobless claims. On Monday’s agenda: Minutes of Reserve Bank of Australia monetary policy meeting.
Here is a short outlook for precious metals for Monday, May 20th:
Precious Metals – May Update
On Friday, the price of gold declined by 1.6% to $1,364.7; Silver also decreased by 1.36% to $22.34. During last week, gold tumbled down by 5%; silver, by 5.5%. Moreover, during last week, the SPDR Gold Shares (GLD) also fell by 6.11% and reached by May 17th 131.07. Shares of Goldcorp Inc (GG) plummeted by 13.21% during last week.
Agenda for Monday, May 20th
Minutes of Reserve Bank of Australia Monetary Policy Meeting: The minutes of the latest monetary policy meeting of the Reserve Bank of Australia may offer some insight behind the Bank’s decision to reduce the basic interest rate by 0.25pp to 2.75%; the minutes of this meeting may affect the Australian dollar, which tends to be correlated with precious metals prices;
Currencies / Bullion Market – May Update
The Euro/ USD slipped on Friday by 0.33% to 1.2839. During the previous week, the Euro/USD decreased by 1.15%. Moreover, other currencies such as the Japanese yen and Aussie dollar also sharply depreciated last week against the U.S dollar by 1.56% and 2.94%, respectively. The depreciation of these currencies against the U.S dollar may have partly contributed to the tumble of gold and silver during last week. The correlations among gold, Canadian dollar and Aussie dollar remained strong and positive: during April and May the linear correlation between gold and USD/CAD reached -0.64 (daily percent shifts); the linear correlation between the gold and AUD/USD was 0.67 (daily percent shifts). If these correlations will continue to stand, the direction of the Aussie, Canadian dollar and Euro are likely to partly affect precious metals rates.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
00:30 – Minutes of Australia’s Bank Monetary Policy Meeting
09:30 – GB CPI
Tentative – Bank of Japan – Rate Decision, Outlook and Monetary Policy Statement
For further reading:
- Gold and Silver Outlook for May 20-24
- Weekly Outlook of Financial Markets for May 20-24
- Will Gold Recover from its Recent Fall?
- Gold and Silver Outlook for May
- Gold and Silver Yearly Outlook For 2013