The rates of silver and gold sharply increased on Tuesday. Their recovery coincided with the drop in long term treasuries yields: the 10 year U.S treasuries securities fell to 2.03%. Will gold and silver rally further? Currently gold and silver prices are slightly declining. On today’s agenda: EU Industrial Production, U.S. Retail Sales, Italian 10 Year Bond Auction, U.S 10 Year Bond Auction and Australia Employment Report.
Here is a short outlook for precious metals for Wednesday, March 13th:
Precious Metals – March Update
On Tuesday, the price of gold rose by 0.87% to $1,591; Silver also increased by 1.1% to $29.15. During March, gold rose by 0.89%; silver increased by 2.64%.
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 ratio between the two precious metals slipped on Tuesday to 54.61. During the month, the ratio declined by 1.71% as gold slightly under-performed silver.
St. Deviation of Gold and Silver
The slow movement of both precious metals rates is represented in the sharp drop in precious metals prices’ volatility during March: the standard deviations of gold and silver (daily percent changes) reached 0.35% and 0.44%, respectively.
On Today’s Agenda
EU Industrial Production: this report will show the monthly developments in the industrial production as of February; as of January, the production rose by 0.7%;
U.S. Retail Sales: this report will present the monthly shifts in the retail sales and food services for February; in the recent report regarding January, the retail sales edged up by 0.1% from the previous month;
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;
Italian 10 Year Bond Auction: the Italian government will issue its monthly with bond auction; in the recent bond auction, which was held at the last week of February, the average rate reached 4.83% – the highest rate in the past several months;
U.S 10 Year Bond Auction: the U.S government will issue its monthly with bond auction; in the previous auction, which was held at the middle of February, the average rate reached 2.05% – the highest rate in the recent months;
Australia Employment Report: in the last report regarding January 2013 the rate of unemployment remained flat at 5.4%; the number of employed (seasonally adjusted) rose by 10,400 people. This report could affect the Aussie dollar (see here the recent report);
Currencies / Bullion Market – March Update
The Euro/ USD inched down on Tuesday by 0.07% to 1.3035. During the month, the Euro/USD slipped by 0.25%. Conversely, several currencies such as the Aussie dollar appreciated again yesterday against the USD by 0.36%. This shows the sharp rise in precious metals had little to do with the movement in the forex markets. Further, 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 -0.3 (daily percent changes); the linear correlation between the gold and AUD/USD reached 0.23 (daily percent changes). Despite the weak correlations, if leading currencies will depreciate against the USD, they might drag down gold and silver.
Current Gold and Silver Rates as of March 13th
Gold (short term delivery) is traded at $1,591 per t oz. a $0.1 or 0.01% decrease as of 23:33*.
Silver (short term delivery) is at $29.16 per t oz – a $0.01 or 0.05% decrease as of 23:33*.
(* GMT)
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
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
Tomorrow
09:00 – ECB Monthly Bulletin
09:30 – Libor Rate of Swiss National Bank
All Day (two days Summit) – EU Economic Summit
13:30 – U.S. Jobless Claims
13:30 – U.S. Producer Price Index
For further reading: