The prices of silver and gold tumbled down yesterday and reached their lowest rates in over three weeks. In Europe the situation isn’t improving: Yesterday it was reported that UK and Italy’s manufacturing PMI fell. The EU unemployment rate rose to its highest level in over a decade to 12%. On the other hand, in the U.S the factory orders rose again during February. In Australia, the RBA left its cash rate unchanged at 3%. Will gold and silver continue to plunge tomorrow? On today’s agenda: ADP estimate of U.S. non-farm payroll, U.S. ISM Non-Manufacturing PMI, Australian Retail Sales, and Bank of Japan Monetary Policy Statement.
Here is a short outlook for precious metals for Wednesday, April 3rd:
Precious Metals – April Update
On Tuesday, the price of gold declined by 1.56% to $1,575.5; Silver plummeted by 2.49% to $27.25. During April, gold decreased by 1.21%; silver, by 3.69%.
In the chart below are the normalized prices of gold and silver between March and April (normalized to 100 as of February 28th). The prices of silver and gold plummeted in the past few days.
U.S. ISM Non-Manufacturing PMI: In the recent monthly update, this index edged up to 56% – this means the non-manufacturing is expanding and at a faster pace than in the previous month; this index may affect the USD;
ADP estimate of U.S. non-farm payroll: ADP will publish its estimate for the upcoming U.S non-farm payroll change for March 2013 in anticipation for the next non-farm report to be published on Friday;
Bank of Japan –Monetary Policy Statement: Bank of Japan will announce its monetary policy for April. The current expectations are that BOJ won’t raise its asset purchase program any further this month. If the Bank will surprise and change its current monetary policy or change its outlook for Japanese economy, this could affect the direction for the Japanese yen;
Australian Retail Sales: The upcoming monthly update will refer to February 2013. In the recent update, the seasonally adjusted retail sales rose by 0.9% during January; this news may affect the Aussie dollar;
Currencies / Bullion Market – April Update
The Euro/ USD changed course and slipped on Tuesday by 0.35% to 1.2821. During the week, the Euro/USD edged up by 0.04%. Conversely, several other currencies such as the Aussie dollar and Canadian dollar moderately appreciated yesterday against the U.S dollar by 0.2% and 0.18%, respectively. The mixed trend in major currencies against the USD didn’t seem to affect or curb the tumble in the prices of bullion. The correlations among gold, Euro, Japanese yen and Aussie dollar remained weak during recent weeks: the linear correlation between gold and USD/Yen reached -0.31 (daily percent changes); the linear correlation between the gold and Euro/USD was -0.20 (daily percent changes). These weak correlations suggest the recent decline in precious metals markets had little to do with the daily shifts in the foreign exchange markets.
Current Gold and Silver Rates as of April 3rd
Gold (short term delivery) is traded at $1,576.0 per t oz. a $0.2 or 0.02% increase as of 01:07*.
Silver (short term delivery) is at $27.19 per t oz – a 0.27% decrease as of 01:07*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
13:15 – ADP estimate of U.S. non-farm payroll
15:00 – U.S. ISM Non-Manufacturing PMI
00:30 – Australian Retail Sales
Tentative – Bank of Japan – Rate Decision and Monetary Policy Statement
Tentative – Spanish 10 Year Bond Auction
12:00 –BOE Rate Decision & Asset Purchase Plan
12:45 – ECB Rate Decision
13:30 – U.S. Jobless Claims
15:30 – Bernanke’s Speech
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