Gold and silver prices continued their fall and declined for the second consecutive day following their sharp rise on Monday. In Europe flash manufacturing PMI indexes rose during July: EU PMI rose to 50.4 (in June it was 48.7); Germany’s PMI rose to 52.8 (50.4 in June) – this means Germany’s manufacturing sectors are growing at a faster pace. This positive news weren’t enough to pull up the Euro. The sharp drop in the Aussie dollar and Japanese yen may have contributed to the decline in commodities prices. In the U.S, new home sales rose by 8.3% during June compared to May and by 38.1% compared to June 2012. This positive news of the growing of housing market may have pressured down precious metals. Will gold and silver prices pull up today? On today’s agenda: Spain’s unemployment Change, German Ifo Business Climate Index, Euro Area Monetary Development, Flash GB GDP Q2 2013, U.S Core Durable Goods, and U.S. Jobless Claims.
Here is a short outlook for precious metals for Thursday, July 25th:
Gold and Silver Recap – July Update
On Wednesday, gold continue its recent decline and fell by 1.14% to $1,319.50; Silver also declined by 1.15% to $20.01. During July, gold rose by 7.82%; silver, by 2.89%.
In the chart below are the normalized rates of silver and gold for 2013 (normalized to 100 as of June 28th). The rates of gold and silver have slipped in recent days.
The gold and silver futures volumes of trade have rallied in recent days and on Tuesday reached 215 thousand and 42 thousand, respectively. These numbers are higher than the volume traded in recent weeks. If the volume will continue to rise today, this could suggest the odds of sudden sharp changes in the prices of gold and silver due to high volume will increase. The chart below presents the volume of trading gold and silver futures in the CME during June and July.
See here the weekly forecast for gold and silver for July 22-26.
On Today’s Agenda
U.S Core Durable Goods: This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of May 2013, new orders of manufactured durable goods increased to $231 billion; if this report will show another rise in new orders then it could pull commodities prices;
U.S. Jobless Claims: in the latest report the jobless claims declined by 24k to reach 334k; the next weekly report may affect precious metals prices;
Spain‘s unemployment Change: the rate of unemployment of the Spain rose again to 27.2%. This mean, the employment situation in Spain hasn’t improved. If in the upcoming report this trend will persist, it may adversely affect the Euro;
German Ifo Business Climate Index: In the recent report for June 2013, the business climate index rose from 105.7 in May to 105.9 in June; if this trend will continue, it might pull up the Euro;
Euro Area Monetary Development: In the previous May report, the annual growth rate for M3 slipped to 2.9%; M1 decreased to 8.4%. Finally, the annual growth rate of loans to private sector reached -0.7%. This news suggests the EU inflation isn’t rising as loans continue to dwindle and the growth rate of M1 and M3 inch down;
Flash GB GDP Q2 2013: This report will present the first estimate of the quarterly growth rate of the British economy for the second quarter of 2013; during the first quarter the GB economy expanded by 0.3% (Q-2-Q); if the growth rate will rise, it could affect the monetary policy of Bank of England and also affect GB pound;
Currencies / Precious Metals Market – July Update
The Euro/ USD currency pair slightly fell on Wednesday by 0.17% to 1.3201. During July, the Euro/USD increased by 1.47%. Moreover, other currencies such as the Aussie dollar and Japanese yen also changed direction and sharply depreciated yesterday against the U.S dollar by 1.44% and 0.84%, respectively. These changes may have contributed to the recent drop in commodities prices. Moreover, if this trend will persist, it may further pull down gold and silver rates.
Current Gold and Silver Rates as of July 25th
Gold (short term delivery) is traded at $1,321.40 per t oz. a $1.3or 0.10% increase as of 09:24*.
Silver (short term delivery) is at $20.06 per t oz – a 0.17% increase as of 09:24*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
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
14:55 – UoM Consumer Sentiment
For further reading: