Gold and Silver Prices – Daily Outlook for July 12

Gold and silver spiked during yesterday’s trading. The volume of trade also rose as the ramifications of Bernanke’s remarks may have contributed to the rally of not only precious metals prices but also equities. The current expectations are that the Fed may not taper QE3 in the coming months. The US dollar also plummeted against leading currencies including Canadian dollar and Euro. In the U.S, jobless claims rose by 16k to reach 360k. The U.S federal budget June update came out and showed a drop of $116 billion in the government’s deficit in 2013.The current deficit is $509 billion – nearly $400 billion below last year’s deficit. The effects of the sequester helped curb the rise in deficit. Will gold and silver continue to trade up? On today’s agenda: U.S. Producer Price Index and UoM Consumer Sentiment.

Here is a short outlook for bullion for Friday, July 12th:

Gold and Silver Prices Breakdown – July Update 

On Thursday, gold spiked by 2.62% to $1,280.1; Silver also sharply increased by 4.13% to $19.95. During July, gold rose by 4.60%; silver slipped by 2.54%.

In the chart below are the normalized rates of gold and silver for 2013 (normalized to 100 as of June 18th). The prices of gold and silver bounced back during the week.

Gold & silver outlook 2013  July 12The ratio between the two precious metals declined on Thursday to 64.18. During July, the ratio rose by 2% as gold slightly out-performed silver.

Gold & silver ratio 2013  July 12The gold and silver futures volumes of trade have risen on Wednesday to 216 thousand and 39 thousand, respectively. These numbers are higher than the volume traded in the past several days. If the volume will continue to pick up, this could suggest the odds of sudden sharp movement in the prices of gold and silver due to high volume will increase. The chart below shows the volume of trading gold and silver futures in the CME during June and July. 

volume Gold & silver prices 2013  July 12Herein is the weekly forecast for gold and silver for July 8-12.

On Today’s Agenda

U.S. PPI: This report will show the developments in the PPI during June 2013. In the previous report regarding May, this index for finished goods rose by 0.5% compared with April’s level and the core PPI by 0.1%;

UoM Consumer Sentiment (preliminary):University of Michigan will come out with its preliminary consumer sentiment monthly update; this survey could offer an insight to latest developments in U.S consumers’ sentiment; According to the recent update, the sentiment index slipped to 82.7;

Currencies / Bullion Market – July Update

The Euro/ USD bounced back and sharply rose by 1.55% on Thursday to 1.2979 – the highest level this week. This currency pair’s rally was following Bernanke’s comments regarding the asset purchase program. During the month, the Euro/USD sharply rose by 0.91%. Moreover, other currencies such as the Canadian dollar sharply appreciated again yesterday against the U.S dollar by 0.95%. The correlations among gold, Euro and Canadian dollar strengthened in recent weeks, e.g. the relation between the USD/CAD and gold price is -0.37 during recent weeks.

Current Gold and Silver Rates as of July 12th

Gold (short term delivery) is traded at $1,252.50 per t oz. a $6.6 or 0.53% increase as of 08:43*.

Silver (short term delivery) is at $19.19 per t oz – a 0.27% increase as of 08:43*.

(* GMT)

Here is a reminder of the top events and publications that are scheduled for today (all times GMT):


13:30 – U.S. Producer Price Index

14:55 – UoM Consumer Sentiment

For further reading: