Gold and silver prices changed direction and fell yesterday. The U.S economy continues to show signs of progress as new factory orders rose by 2.1% during May. In Australia, the Reserve Bank of Australia left its policy unchanged and the rate at 2.75%. Moreover, RBA governor gave a speech yesterday regarding the recent developments in Australia’s economy. Will gold and silver prices change direction and rally? On today’s agenda: Australian Retail Sales, Australian Trade Balance, ADP estimate of U.S. non-farm payroll, American Trade Balance, Canadian Trade Balance, U.S. Jobless Claims, and U.S. ISM Non-Manufacturing PMI.
Here is a short outlook for precious metals for Wednesday, July 3rd:
Precious Metals – July Update
On Tuesday, gold changed direction and declined by 0.98% to $1,243.4; Silver also decreased by 1.36% to $19.30. During July, gold rose by 1.60%; silver slipped by 0.77%.
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 moved in an unclear trend in recent days.
The ratio between the two precious metals increased on Tuesday to 64.42. During the month, the ratio rose by 2.39% as gold slightly out-performed silver.
St. Deviation of Gold and Silver
The high movement of both bullion rates is represented in the high volatility of precious metals prices’ during last month: the standard deviations of gold and silver (daily percent changes) reached 1.89% and 2.67%, respectively.
On Today’s Agenda
Australian Retail Sales: This monthly update will refer to May 2013. In the previous update, the seasonally adjusted retail sales declined by 0.1% during April;
Australian Trade Balance: In the last update, regarding April, the seasonally adjusted balance of goods and services slipped to a $28 million surplus. The export of non-monetary gold rose by $138 million; if the gold exports will continue to rise in March, it might suggest an increase in demand for non-monetary gold (see here recent report);
ADP estimate of U.S. non-farm payroll: ADP will come out with its estimate for the forthcoming U.S non-farm payroll change for June 2013 that will be published on Friday;
American Trade Balance: This monthly update for May will show the changes in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; according to the recent American trade balance report regarding April the goods and services deficit rose during the month to $40.3 billion;
Canadian Trade Balance: In the previous report regarding April 2013, exports inched down by 0.2% and imports increased by 1.2%; as a result, the trade balance fell from a $3 billion deficit in March to $567 million in April;
U.S. Jobless Claims Weekly Report: in the latest report the jobless claims fell by 9k to reach 346k; this upcoming weekly update may affect the U.S dollar;
U.S. ISM Non-Manufacturing PMI: This monthly update will pertain to the changes in the non-manufacturing sector during June 2013. For the last report, this index inched up to 53.7% – thus, the non-manufacturing is expanding and at a faster rate than in the previous month;
Currencies / Bullion Market – July Update
The Euro/ USD currency pair also changed direction and fell on Tuesday by 0.65% to 1.2979. During the month, the Euro/USD slipped by 0.24%. Moreover, other currencies such as the Aussie dollar also depreciated yesterday against the U.S dollar by 0.99%. The correlations among gold, Euro and Aussie dollar weakened, e.g. the correlation between the AUD/USD and gold price is 0.31 during June-July. If these correlations will continue to weaken, the movement of the Aussie, Euro and Canadian dollar against the USD are likely to have a lesser effect on bullion prices.
Current Gold and Silver Rates as of July 3rd
Gold (short term delivery) is traded at $1,244.50 per t oz. a $1.1 or 0.09% increase as of 05:03*.
Silver (short term delivery) is at $19.42 per t oz – a 0.57% increase as of 05:03*.
(* GMT)
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
00:30 – Australian Retail Sales
02:30 – Australian Trade Balance
13:15 – ADP estimate of U.S. non-farm payroll
13:30 –American Trade Balance
13:30 – Canadian Trade Balance
13:30 – U.S. Jobless Claims Weekly Report
15:00 – U.S. ISM Non-Manufacturing PMI
Tomorrow
01:30 – Bank of Japan’s Kuroda Speaks
12:00 –BOE Rate Decision & Asset Purchase Plan
12:45 – ECB Rate Decision
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