Gold and silver changed course again this time slightly rose after they have tumbled down a day earlier. Major “risk related currencies” such as the Euro and Canadian dollar also rallied against the USD. Yesterday, it was reported that number of jobless claims declined by 42k to reach 388k. This news, however, didn’t help pull up the USD. The minutes of the recent FOMC meeting raised the speculation that the Fed’s asset purchase program may end sooner than many had anticipated. This news may keep pulling down precious metals. Will gold and silver change course again and fall? Currently, the prices of gold and silver are tumbling down along with other commodities such as oil and equities. On today’s agenda: EU Industrial Production, UoM Consumer Sentiment (update: consumer sentiment fell from 78.6 in March to 72.3 in April, Bernanke’s Speech, Euro-Group Summit, U.S. Producer Price Index and retail sales monthly report (update: retail sales declined by 0.4%).
Here is a short outlook for precious metals for Friday, April 12th:
Precious Metals – April Update
On Thursday, the price of gold changed direction and slightly increased by 0.39% to $1,564.5; Silver also rose by 0.16% to $27.70. During April, gold declined by 1.9%; silver, by 2.1%.
In the chart below are the normalized prices of gold and silver during April (normalized to 100 as of March 28th). The rates of precious metals mostly declined in the past several weeks.
Euro-Group Summit: In this summit, the EU ministers of finance are likely to refer to the Cyprus debt crisis. They will convene in Dublin. In this summit the EU ministers are likely to go over steps needed to take vis-à-vis the Cyprus bailout;
U.S. Producer Price Index: This report will show the changes in the PPI during March 2013, i.e. the inflation rate from the producers’ side. In the previous report regarding February, this index for finished goods increased by 0.7% compared with January’s rate and by 1.7% in the past 12 months; this news might affect the path of commodities rates;
U.S. Retail Sales Report: in the recent report regarding February, the retail sales rose by 1.1% from the previous month; this report could signal the developments in U.S’s consumer demand;
EU Industrial Production: this report will show the monthly changes in the industrial production as of March; as of February, the production declined by 0.4%;
UoM Consumer Sentiment (preliminary):University of Michigan will come out with its preliminary consumer sentiment monthly update; this survey could offer an insight to latest changes in U.S consumers’ sentiment; based on the recent update, the sentiment index changed direction and fell to 71.8;
Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will give another speech this week at the 2013 Federal Reserve System Community Development Research. The title of his speech is “Creating Resilient Communities“.
Currencies / Bullion Market – April Update
The Euro/ USD inched down on Thursday by 0.21% to 1.31. During April, the Euro/USD increased by 2.22%. Moreover, other currencies such as the Japanese yen and Canadian dollar slightly appreciated again yesterday against the U.S dollar by 0.11% and 0.36%, respectively. The appreciation of major currencies against the USD didn’t seem to help rally gold and silver prices. The correlations among gold, Euro and Aussie dollar remained weak during March/April: the linear correlation between gold and USD/YEN was -0.07 (daily percent changes); the linear correlation between the gold and USD/CAD reached 0.27 (daily percent changes). These weak relations suggest the recent decline in the prices of precious had little to do with the daily shifts of leading currencies pairs.
Current Gold and Silver Rates as of April 12th
Gold (short term delivery) is traded at $1,561.2 per t oz. a 0.35% decrease as of 01:48*.
Silver (short term delivery) is at $27.62 per t oz – a 0.57% decrease as of 01:48*.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
10:00 –EU Industrial Production
All Day (two days Summit) – Euro-Group Summit
13:30 – U.S. Producer Price Index
13:30 –U.S. Retail Sales Report
14:55 – UoM Consumer Sentiment
15:30 – Bernanke’s Speech
For further reading: