The recent “non decision” of ECB President, in which he decided to keep the ECB’s cash rate unchanged helped pull up the “risk related currencies” including the Euro and Aussie dollar. BOE also left its policy unchanged. In the U.S jobless claims slipped to 346k. This news may have contributed to the sudden recovery of commodities prices including gold and silver prices. The main U.S event of the week will unfold today: non-farm payroll report. If it will exceed the current ADP expectations of 135k jobs added it could pull up equities and commodities markets (update: jobs grew by 175k). Currently , the prices of gold and silver are tumbling down. On today’s agenda: U.S. Jobs report, Canada’s employment report, China’s CPI and China’s Trade Balance.
Here is a short outlook for precious metals for Friday, June 7th:
Precious Metals – May Update
On Thursday, gold increased again by 1.24% to $1,415.8; Silver also rose by 1.05% to $22.71. During June, gold rose by 1.67%; silver, by 2.15%.
In the chart below are the normalized prices of gold and silver for the past couple of weeks (normalized to 100 as of May 17th). The prices of gold and silver slightly rose in the past couple of days.
Canada‘s Employment Report: In the latest employment update for April 2013, unemployment remained unchanged at 7.2%; the employment rose by 12.5k during the month;
U.S. Non-Farm Payroll Report: in the latest update for April 2013, the labor market increased again: the number of non-farm payroll employment rose by 165k; the U.S unemployment rate inched down to 7.5%; if in the upcoming report the employment will rise again by over 150 thousand (in additional jobs), this may lower the prices of precious metals (see here my last review on the U.S employment report);
China‘s Trade Balance: based on the recent monthly report, China’s trade balance rose to an $18.2 billion surplus;
China‘s CPI: during April, the Chinese inflation rate increased to an annual rate of 2.4%; this rate is still below China’s inflation target of 4% in annual terms. The low inflation is another indication for a slowdown in the economic activity in China. If the inflation will pick up, it could indicate that China’s economic progress is warming up;
Currencies / Bullion Market – May Update
The Euro/ USD sharply rose on Thursday by 1.17% to 1.3246. During June, the Euro/USD increased by 1.90%. Moreover, other currencies such as the Aussie dollar and Japanese yen also appreciated yesterday against the U.S dollar by 0.57% and 2.17%, respectively. The correlations among precious metals and leading currencies have strengthened: during recent weeks the linear correlation between gold and USD/CAD reached -0.51 (daily percent changes); the linear correlation between the gold and AUD/USD was 0.58 (daily percent changes). If these correlations will hold up, the path of the Aussie, Canadian dollar and Euro against the USD are likely to pull the direction of precious metals.
Current Gold and Silver Rates as of June 7th
Gold (short term delivery) is traded at $1,413.60 per t oz. a $2.2 or 0.16% decrease as of 04:19*.
Silver (short term delivery) is at $22.71 per t oz – a 0.01% increase as of 04:19*.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
13:30 – Canada’s Employment Report
13:30 – U.S. Non-Farm Payroll Report
Tentative –China’s Trade Balance
Tentative – China’s CPI
For further reading: