The prices of gold and silver declined yesterday. A few U.S reports were published yesterday: the U.S CPI edged up by 0.1%; the Philly Fed survey showed the manufacturing have deteriorated mainly due to the adverse effect of Hurricane Sandy. The U.S jobless claims rose by 78k to reach 439k. This news may have contributed to the fall of gold and silver and other commodities and stock indexes. The Eurostat published yesterday that the Euro Area GDP edged down by 0.1% during the third quarter while the EU27 GDP rose by 0.1%. This news may have had a modest effect on the Euro. Currently, the prices of gold and silver are declining. On today’s agenda: U.S. TIC Long Term Purchases, U.S. Industrial Production.
Here is a short outlook for precious metals for Friday, November 16th:
Precious Metals –November Update
On Thursday, the price of gold declined by 0.94% and settled at $1,713.8; Silver also decreased by 0.64% to $32.67. During November, gold slipped by 0.31%; silver rose by 1.1%.
As seen below, the chart presents the developments of the normalized prices of precious metals during November (normalized to 100 as of October 31st). During the month, both gold and silver didn’t do much and only slightly changed from their starting point.
The ratio between the two precious metals declined on Thursday to 52.46. During November, the ratio declined by 1.39% as gold under-performed silver.
Despite the different directions gold and silver had yesterday, the linear correlation of the two precious metal daily percent changes is still strong and robust, as seen in the chart herein. During November the linear correlation of their daily percent changes reached the highest level this years so far, which means the two metals’ relation has tighten during the month.
On Today’s Agenda
U.S. TIC Long Term Purchases: The Treasury International Capital report will present the shifts in the purchases and sales of US long term treasuries in September 2012. In the previous report regarding August 2012, the net foreign sales of U.S Treasuries longer-term notes reached $90 billion;
U.S. Industrial Production: in the recent report regarding September, the industrial production rose by 0.4% from the previous month and declined by 1.2% during August; this report could affect the strength of the USD;
Currencies / Bullion Market – November Update
The Euro/ USD increased again by 0.36% and reached on Thursday to 1.2782. During November, the Euro/USD decreased by 1.37%. Conversely, several other currencies such as Aussie dollar and Yen depreciated yesterday against the USD by 0.11%, 1.16%, respectively. This mixed trend might have contributed to the sharp changes in the prices of bullion during yesterday. The correlation among gold silver, Euro and remains robust: during October and November, the linear correlation between gold and Euro /USD reached 0.46 (daily percent changes); the linear correlation between the gold and Aussie /USD was 0.43 (daily percent changes). Thus, if the Euro and other risk currencies will change resume their downward trend today against the USD, they are likely to drag down gold and silver.
Current Gold and Silver Rates as of November 16th
Gold (December 2012 delivery) is traded at $1,725.2 per t oz. a $1.2 or 0.07% decrease as of 06:46*.
Silver (December 2012 delivery) is at $32.39 per t oz – a $0.29 or 0.88% decrease as of 06:47*.
Daily Outlook for November 16th
Precious metals changed direction again and declined yesterday. This downward trend might continue today. The recent publication of the jobless claims and Philly fed survey may have had an adverse effect on commodities and stock markets. The upcoming publication of the TIC Long Term Purchases, and U.S. Industrial Production could affect the USD. If the Industrial Production report will show signs of little progress in the U.S economy this could pull down commodities prices and major stock indexes. Finally, if Euro and other “risk currencies” will decline against the USD, then they are likely to adversely affect precious metals.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
14:00 – U.S. TIC Long Term Purchases
14:15 –U.S. Industrial Production
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