The spike in gold and silver prices didn’t last long and following their spike on Monday, precious metals changed direction and slipped on Tuesday. The recent disappointing manufacturing PMI for China, in which the PMI index estimated by HSBC fell to 47.7 ( a month earlier it was 48.2) suggest not only the manufacturing sectors in China are slowing down but they also deteriorate at a faster pace compared to last month. This news may have dragged down precious metals prices. Will gold and silver prices change direction again today? On today’s agenda: Flash German, French and Euro Zone Manufacturing PMI and U.S New Home Sale.
Here is a short outlook for precious metals for Wednesday, July 24th:
Gold and Silver Prices Review – July Update
On Tuesday, gold changed direction and slipped by 0.10% to $1,334.70; Silver also fell by 1.23% to $20.25. During the month, gold rose by 9.06%; silver, by 4.09%.
In the chart below are the normalized prices of silver and gold for 2013 (normalized to 100 as of June 28th). The prices of gold and silver have increased during most of July.
See here the weekly outlook of gold and silver for July 22-26.
On Today’s Agenda
Flash German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding June 2013, the German PMI inched down to 48.7 i.e. the manufacturing conditions are shrinking at a slightly faster pace. This report serves as an indicator to the economic changes of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently precious metals;
U.S. New Home Sales: In the recent report (opens pdf; for May), the sales of new homes slightly rose to an annual rate of 476,000 – a 4.8% gain (month over month); if the number of home sales will continue to rise, it may suggest the housing market in the U.S continues to progress; this news may also affect the USD;
Currencies / Bullion Market – July Update
The Euro/ USD currency pair slightly rose again on Tuesday by 0.28% to 1.3223. During July, the Euro/USD increased by 1.64%. Moreover, other currencies such as the Aussie dollar and Japanese yen also appreciated yesterday against the U.S dollar by 0.51% and 0.24%, respectively. The correlations among gold, Euro and Aussie dollar remained strong and positive, e.g. the correlation between the AUD/USD and gold price is 0.40 during July. If these correlations will remain robust, the currencies pairs Aussie/USD, Euro/USD and Canadian dollar/USD are likely to pull up precious metals rates.
Gold (short term delivery) is traded at $1,343.60 per t oz. an $8.4 or 0.63% increase as of 08:06*.
Silver (short term delivery) is at $20.37 per t oz – a 0.55% increase as of 08:06*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:00 – Flash German, French and Euro Zone Manufacturing PMI
15:00 – U.S. New Home Sales
08:00 – Spain’s unemployment Change
09:00 – German Ifo Business Climate Index
09:00 – Euro Area Monetary Development
09:30 – Flash GB GDP Q2 2013
13:30 – U.S Core Durable Goods
13:30 – U.S. Jobless Claims Weekly Report
For further reading: