After last week’s plunge in gold and silver prices, precious metals continued this trend and fell on the first day of the week. The Fed’s next move seems to keep precious metals’ high sales. Will gold and silver bounce back today after they had declined in recent weeks? On today’s agenda: U.S New Home Sales, GB inflation hearings, and U.S Consumer Confidence.
Here is a short outlook for precious metals for Tuesday, June 25th:
Precious Metals – June Update
On Monday, gold declined by 1.15% to $1,276.8; Silver also plummeted by 2.33% to $19.493. During June, gold declined by 8.32%; silver, by 12.30%.
In the chart below are the normalized prices of gold and silver for 2013 (normalized to 100 as of May 31st). The rates of gold and silver sharply fell in recent weeks.
The ratio between the two precious metals sharply rose on Monday to 65.50. During June, the ratio rose by 4.55% as gold out-performed silver.
The gold and silver futures volumes of trade have declined on Monday to 171 thousand and 89 thousand, respectively – the lowest volume of trade in recent days. This low volume might continue to decline, which will impact precious metals volatility. If the volume will fall in the coming days, this could lead to a decrease in volatility of precious metals. The chart below presents the volume of trading gold and silver futures in the CME from the past several weeks.
Currencies / Bullion Market – June Update
The Euro/ USD inched down on Monday by 0.02% to 1.3120. During the month, the Euro/USD increased by 0.93%. Conversely, other currencies such as the Aussie dollar appreciated yesterday against the U.S dollar by 0.33%. The correlations among gold, Euro and Aussie dollar strengthened, e.g. the correlation between the Euro/USD and gold price is 0.52. If these correlations will continue to strengthen, the movement of the Aussie, Euro and Japanese yen are likely to have a stronger effect on precious metals prices.
On Today’s Agenda
GB inflation hearings: In this hearing BOE Governor will testify regarding the economic progress of GB and inflation developments;
U.S Consumer Confidence: according to the latest monthly report, for April, the consumer confidence index rose to 76.2 (M-o-M). The current expectations are that the April index may continue to increase; this report might affect precious metals;
U.S. New Home Sales: This report will pertain to May 2013; in the previous report (opens pdf; for April), the sales of new homes slightly rose to an annual rate of 454,000 – a 8.8% gain (month over month); if the number of home sales will continue to increase, it may provide a sign of recovery in the U.S real estate market; this news may also affect the USD.
Current Gold and Silver Rates as of June 25th
Gold (short term delivery) is traded at $1,278.80 per t oz. a $1.7 or 0.13% increase as of 08:44*.
Silver (short term delivery) is at $19.62 per t oz – a 0.65% increase as of 08:44*.
(* GMT)
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
09:30 – GB inflation hearings
15:00 – U.S Consumer Confidence
15:00 – U.S. New Home Sales
Tomorrow
09:00 – Gfk German Consumer Climate Survey
13:30 – Third Estimate of U.S GDP for 1Q 2013
For further reading:
- Gold and Silver Outlook for June
- Will Gold Recover from its Recent Fall?
- Gold and Silver Prices Outlook for June 24-28
- Weekly Outlook of Financial Markets for June 24-28
- Euro/USD Weekly Overview for June 24-28
- Gold and Silver Yearly Outlook For 2013