The prices of silver and gold moderately increased yesterday. Their modest rally coincided with the rise in major risk related currencies against the USD including Euro and Aussie dollar. Will gold and silver continue to slowly rise? Currently precious metals prices are sharply rising. On today’s agenda: Great Britain Manufacturing Production, U.S. Federal Budget Balance, and Great Britain Trade Balance.
Here is a short outlook for precious metals for Tuesday, March 12th:
Precious Metals – March Update
On Monday, the price of gold inched up by 0.07% to $1,578; Silver decreased by 0.34% to $28.83. During March, gold inched up by 0.02%; silver increased by 1.52%.
In the chart below are the normalized rates of gold and silver between late February and March (normalized to 100 as of February 18th). The prices of gold and silver remained virtually flat in recent weeks.
The gold and silver futures volumes of trade declined on Monday to 132 thousand and 25 thousand, respectively. These numbers are lower than the volume traded in recent weeks. If the volume will remain low today, this could imply the possibility of sudden sharp movement in the rates of gold and silver due to low volume is low. The chart below presents the volume of trading gold and silver futures in the CME in the last few weeks.
U.S. Federal Budget Balance: this report indicates the government debt growth and thus may affect the U.S dollar. In the previous report regarding January the deficit remained virtually unchanged; the total deficit for the fiscal year of 2013 reached $290 billion. In comparison, the deficit in the same time in 2012 was $348.8 billion; this is decrease of 16.8% compared to 2012;
Great Britain Manufacturing Production: this report will show the yearly rate of GB’s manufacturing production for January; in the previous report regarding December the index changed course and rose by 1.6% (M-2-M); this news may affect the British Pound;
Great Britain Trade Balance: According to the previous monthly update the trade balance deficit declined to 8.9 billion pound;
Currencies / Bullion Market – March Update
The Euro/ USD slightly rose on Monday by 0.3% to 1.3044. During the month, the Euro/USD inched down by 0.48%. Moreover, several currencies such as the Aussie dollar slightly appreciated yesterday against the USD by 0.5%. The moderate gain in the leading currencies against the USD may have moderately contributed to the moderate rise of precious metals prices. Nonetheless, the correlations among gold, Canadian dollar and Aussie dollar remained weak in recent weeks: during February/March, the linear correlation between gold and USD/Yen reached -0.22 (daily percent changes); the linear correlation between the gold and AUD/USD reached 0.18 (daily percent changes). These weak correlations might imply the little gain of gold and silver prices had little to do with the daily movement in the foreign exchange markets. If leading currencies will change course and depreciate against the USD, they might pull down gold and silver.
Current Gold and Silver Rates as of March 12th
Gold (short term delivery) is traded at $1,582.0 per t oz. a $4.4 or 0.25% increase as of 11:08*.
Silver (short term delivery) is at $28.92 per t oz – a $0.07 or 0.23% increase as of 11:08*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – Great Britain Manufacturing Production
09:30 – Great Britain Trade Balance
Tentative –OPEC Monthly Report
19:00 –U.S. Federal Budget Balance
10:00 –EU Industrial Production
13:30 –U.S. Retail Sales Report
Tentative – Italian 10 Year Bond Auction
Tentative – U.S 10 Year Bond Auction
02:30 – Australia Employment Report
For further reading:
- Why Gold Isn’t Pulling Up?
- What Could Impede This Gold Company?
- Gold and Silver Outlook for March 11-15
- Weekly Outlook of Financial Markets for March 11-15
- Gold and Silver Outlook for March
- Gold and Silver Yearly Outlook For 2013