The precious metals market continues to seek direction: yesterday both gold and silver changed course again and this time rallied. In the past several business days precious metals prices moved in an unclear trend even though in the past several weeks both metals slightly recovered from their sharp fall at the first two weeks of April. Will gold and silver changed direction and fall? On today’s agenda: Australia Employment Report, ECB Monthly Bulletin, Great Britain Manufacturing Production, Spanish 10 Year Bond Auction, BOE Rate Decision, U.S. Jobless Claims, and Japan Current Account.
Here is a short projection for precious metals for Thursday, May 9th:
Precious Metals – May Update
On Wednesday, the price of gold changed course and rose by 1.72% to $1,473.7; Silver also increased by 0.51% to $23.91. During the month, gold rose by 0.1%; silver slipped by 0.97%.
In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of April 15th). The prices of gold and silver rallied in the past several weeks.
The ratio between the two precious metals rose on Wednesday to 61.64. During the month, the ratio rallied by 1.08% as gold slightly out-performed silver.
The gold and silver futures volumes of trade have increased on Wednesday to 205 thousand and 42 thousand, respectively. These numbers are higher than the volume traded during last week. If the volume will remain high today, this could suggest the odds of sudden sharp movement in the prices of gold and silver due to high volume will rise. The chart below shows the volume of trading gold and silver futures in the CME in the past several weeks.
On Today’s Agenda
Australia Employment Report: in the recent report regarding March 2013 the rate of unemployment rose to 5.6%; the number of employed (seasonally adjusted) fell by 36,100 people (see here the recent report);
ECB Monthly Bulletin: This monthly report for April examines the economic changes of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some insight on the projections of the EU growth;
Great Britain Manufacturing Production: this report will show the annual rate of GB’s manufacturing production in March; in the previous report regarding February 2013 the index changed course and rose by 0.8% (M-2-M); this news may affect the British Pound;
Spanish 10 Year Bond Auction: in the last bond auction, which was held a few weeks back, the average rate reached 4.61%;
BOE Rate Decision: Bank of England will decide on its basic rate for May 2013; the MPC will also announce of any new changes to its asset purchase pogrom; as of April, BOE left the rate unchanged at 0.5% and the asset purchase plan s at £375 billion;
U.S. Jobless Claims: in the latest report the jobless claims fell by 18k to reach 324k; this forthcoming weekly update may affect the U.S dollar and consequently commodities and stocks markets;
Japan Current Account: this report will present the developments in the difference between exports and imports for Japan during the previous month; this news may affect the strength of the Yen;
Currencies & Bullion Market – May Update
The Euro/ USD rose on Wednesday by 0.57% to 1.3153. During the month, the Euro/USD slipped by 0.11%. Moreover, other currencies such as the Canadian dollar slightly appreciated yesterday against the U.S dollar by 0.15%. The appreciation of these currencies against the U.S dollar may have partly contributed to the rally of gold and silver during yesterday. The correlations among gold, Canadian dollar and Aussie dollar remained strong: during April/May the linear correlation between gold and USD/CAD reached -0.67 (daily percent changes); the linear correlation between the gold and AUD/USD reached 0.59 (daily percent changes). These correlations imply the recent rise of precious metals prices was partly correlated to the shifts in the foreign exchange markets.
Current Gold and Silver Rates as of May 9th
Gold (short term delivery) is traded at $1,473.1 per t oz. a $0.6 or 0.04% decrease as of 06:01*.
Silver (short term delivery) is at $24.11 per t oz – a 0.76% increase as of 06:01*.
(* GMT)
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
02:30 – Australia Employment Report
09:00 – ECB Monthly Bulletin
09:30 – Great Britain Manufacturing Production
Tentative – Spanish 10 Year Bond Auction
12:00 –BOE Rate Decision & Asset Purchase Plan
13:30 – U.S. Jobless Claims
00:50 – Japan Current Account
Tomorrow
01:30 – Reserve Bank of Australia – Monetary Policy Statement
All Day – G7 Summit
13:30 – Canada’s Employment Report
14:30 – Bernanke’s Speech
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