Gold and Silver – Daily Forecast for January 2nd

The holiday season is behind us and the markets are likely to slowly weaken from their two week slumber. The prices of gold and silver declined during the week and might change direction in the coming days. On today’s agenda: China Manufacturing PMI, Spanish Manufacturing PMI, GB Manufacturing PMI, U.S. Jobless Claims, and U.S Manufacturing PMI.

Here is a short overview for precious metals for Thursday, January 2nd:

Gold and Silver – January Review                             

On Tuesday, gold slightly declined by 0.12% to $1,202.3; Silver, by 1.34% to $19.34. During last month, gold declined by 3.85%; silver, by 3.30%. In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of November 29th). The prices of gold and silver have slightly declined during December.

Gold and silver Chart 2013  January 2The ratio between the two precious metals rose on Tuesday to 62.17. During December, the ratio slightly slipped by 0.57% as silver has moderately out-performed gold.

Gold  to silver ratio Chart 2013  January 2The gold and silver futures volumes of trade have risen and reached on Tuesday 128 thousand and 46 thousand, respectively. The volume of trade is likely to pick up in coming days. 

On Today’s Agenda

China Manufacturing PMI (HSBC’s final estimate): This is HSBC’s last update on its estimate for December’s PMI index. Last month’s Manufacturing PMI reached 50.8 – i.e. China’s manufacturing sectors is expanding at a slightly slower pace than the previous month. If the updated PMI index falls again, this will suggest China’s manufacturing conditions aren’t improving;

Spanish Manufacturing PMI: This report will pertain to Spain’s manufacturing sector in December 2013. In the last update regarding November 2013 the index fell to 48.6. This rate drop means the manufacturing sector is contracting;

GB Manufacturing PMI: During November, Great Britain’s manufacturing index rose to 58.4. This rate gain means the manufacturing sector is growing at a faster rate; this index might affect GB Pound;

U.S. Jobless Claims Weekly update:  This weekly update will pertain to the changes in the initial jobless claims for the week ending on December 28th; in the previous report the jobless claims decreased by 42k to reach 338k;

U.S Manufacturing PMI: This report will pertain to December 2013. In November, the index rose again to 57.3% – the highest level in the past couple of years; this means the manufacturing is growing at a faster rate;

Currencies / Precious Metals Correlations – December Update

On Wednesday, the Eur/USD currency pair fell by 0.42% to 1.3743. During December, the Eur/USD increased by 1.12%. Conversely, other currencies such as the Aussie dollar and Canadian dollar slightly appreciated yesterday against the U.S dollar by 0.15% and 0.23%, respectively. The correlations among gold, silver and Euro have further weakened again in recent weeks, e.g. the correlation between the Euro/USD and gold price is only 0.10 during November-December – its lowest level since September. This could suggest the movement of gold and silver prices have little to do with the developments in the forex market.

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


02:45 – China Manufacturing PMI

08:15 – Spanish Manufacturing PMI

09:30 – GB Manufacturing PMI

13:30 – U.S. Jobless Claims

15:00 – U.S Manufacturing PMI


08:00 – KOF Economic Barometer

08:00 – Spain’s Unemployment Update

09:00 – Euro Area Monetary Development

09:30 – GB Construction PMI

For further reading: