Precious metals continued to rally as gold and silver rates rose for the second consecutive day. In the U.S, jobless claims rose by 10k to reach 354k during the previous week; the second GDP estimate was published yesterday: the U.S GDP for the first quarter of 2013 expanded by 2.4%, which is slightly lower than the previous estimate; pending home sales edged up during April. The little to no improvement in the U.S economy according to these reports may have contributed to the depreciation of the USD against leading currencies and the rally of precious metals. Will gold and silver change course on the last day of the week? On today’s agenda: KOF Economic Barometer, German Retail Sales, U.S Personal spending, Canada’s GDP by Industry, UoM Consumer Sentiment and China Manufacturing PMI.
Here is a short outlook for precious metals for Friday, May 31st:
Precious Metals – May Update
On Thursday, gold rose again by 1.45% to $1,411.5; Silver also increased by 1.05% to $22.67. During May, gold declined by 4.12%; silver, by 6.09%.
In the chart below are the normalized rates of gold and silver for 2013 (normalized to 100 as of April 15th). The prices of gold and silver rallied in the past several days.
KOF Economic Barometer: this monthly update provides an estimate to the Swiss economy in the months to come;
German Retail Sales: This monthly update will show the shifts in German retail sales during April. In March 2013, retail sales slipped by 0.3% – lower than many had anticipated; if this report will show a drop again in sales then it might weakened the Euro;
U.S Personal spending: this monthly update will refer to the shifts in income and outlays in the U.S during April; in the last report regarding March the personal income rose by 0.2%;
Canada‘s GDP by Industry: this monthly report shows the changes in major industrial sectors for March 2013. In the recent update regarding February 2013, the real gross domestic product slightly increased by 0.3%. This report may affect the Canadian dollar, which is strongly linked with major commodities prices;
UoM Consumer Sentiment (revised):University of Michigan will come out with its revised consumer sentiment monthly report; this survey could offer an insight to recent developments in U.S consumers’ sentiment; based on the latest report, the sentiment index fell to 76.4;
China Manufacturing PMI: Based on the latest report for April the Manufacturing PMI edged down to 50.6; the recent flash PMI report fell below the 50 point market. If in the upcoming report the PMI will drop below the 50 point mark, it could signal slowdown in China’s economy.
Currencies / Bullion Market – May Update
The Euro/ USD also rose on Thursday by 0.83% to 1.3050. During May, the Euro/USD decreased by 0.90%. Moreover, other currencies such as the Aussie dollar and Canadian dollar also appreciated yesterday against the U.S dollar by 0.27% and 0.52%, respectively. The correlations among gold, Canadian dollar and Aussie dollar remained mid-strong: during the month, the linear correlation between gold and USD/CAD reached -0.39 (daily percent changes); the linear correlation between the gold and AUD/USD was 0.56 (daily percent changes). If the Aussie, Canadian dollar and Euro continue to appreciate against the USD, they could keep pulling up bullion prices.
Current Gold and Silver Rates as of May 31st
Gold (short term delivery) is traded at $1,386 per t oz. a $0.7 or 0.05% increase as of 08:52*.
Silver (short term delivery) is at $22.67 per t oz – a 0.11% decrease as of 08:52*.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
08:00 – KOF Economic Barometer
08:00 – German Retail Sales
13:30 – U.S Personal spending
13:30 – Canada’s GDP by Industry
14:55 – UoM Consumer Sentiment
02:00 – China Manufacturing PMI
For further reading:
- Gold and Silver Outlook for June
- Will Gold Recover from its Recent Fall?
- Gold and Silver Outlook for May 27-31
- Weekly Outlook of Financial Markets for May 27-31
- Gold and Silver Yearly Outlook For 2013