Gold and Silver Prices – Daily Outlook for September 25th

The prices of gold and silver continued their downward trend and completed yesterday a three day drop. Their recent descent coincided with the ongoing weakening of leading currencies against the US dollar. In the news, the German IFO Business Climate rose to 107.7 – lower than expectations. This news may have slightly contributed to the depreciation of the Euro against the USD. In the US, consumer confidence index slightly declined from 81.8 in August to 79.7 in September. This news, however, may have pressured down the U.S stock markets and commodities prices. It seems that the FOMC’s no-tapering decision has had a very limited positive effect on gold and silver prices. Will gold and silver change directi and rally today? On today’s agenda: U.S New Home Sales, U.S Core Durable Goods, and Gfk German Consumer Climate Survey.

Here is a short overview for precious metals for Wednesday, September 25th:

Gold and Silver Prices Recap – September Update

On Tuesday, gold fell by 0.83% to $1,316; Silver also decreased by 1.25% to $21.54. During September, gold decreased by 5.72%; silver, by 8.25%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of August 30th). The prices of gold and silver have mostly fallen in recent weeks.

Gold and silver prices 2013  September 25The ratio between the two precious metals rose on Tuesday to 61.09. During September, the ratio increased by 2.76% as silver has under-performed gold.

Gold  silver ratio 2013  September 25See here the weekly outlook for gold and silver for September 23-27.

On Today’s Agenda

U.S. New Home Sales: In the recent report (opens pdf; for July), the sales of new homes sharply fell to an annual rate of 394,000 – a 13.4% drop (month- over-month); if the number of home sales keep falling, this may suggest the housing market in the U.S is cooling down;

U.S Core Durable Goods: This monthly report may indirectly indicate the changes in U.S. demand for commodities. As of July, new orders of manufactured durable goods declined to $485 billion; if this report shows another drop in new orders, then it could pull down commodities rates;

Gfk German Consumer Climate Survey: This survey projects Germany’s consumers’ economic climate (past and future economic conditions – on a monthly basis) for September. In the latest report for August 2013, the climate index slightly declined to 6.9;

Currencies / Precious Metals– September Update

On Tuesday, the Euro/ USD currency pair inched down by 0.14% to 1.3474. During the month, so far, the Euro/USD rose by 1.91%. Further, other currencies such as the Aussie dollar and Canadian dollar also depreciated yesterday against the U.S dollar by 0.42% and 0.16%, respectively. The correlations among gold, Euro and Aussie dollar have weakened during the month, e.g. the correlation between the Euro/USD and gold price is only 0.15 during September. The chart below shows the linear correlations among leading currencies pairs and gold and silver prices.

Correlation Gold and EURO USD 2013 September 25Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):


07:00 – Gfk German Consumer Climate Survey

13:30 – U.S Core Durable Goods

15:00 – U.S. New Home Sales


09:00 – Euro Area Monetary Development

09:30 – GB Current Account

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

13:30 – U.S. Jobless Claims

15:00 – U.S. Pending Home Sales

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