Gold and silver prices bounced back from their tumble in recent days. Other commodities including oil also rallied during Thursday’s trading. U.S jobless claims nearly didn’t change and core durable goods report presented a mixed trend and little movement. The speculation around the future of Greece keeps eclipsing other events and news items. I have analyzed how a Grexit might affect bullion prices.
On today’s agenda: U.S Consumer Sentiment, and German Consumer Climate Survey. Currently precious metals prices are increasing.
Here is a short outlook for gold and silver for Friday, May 25th:
Precious Metals – May Update
Gold price bounced back on Thursday by 0.74% to $1,559.8; silver also increased by 2.32% to $28.16. This increase in metals rates was the first for the week. During the month gold declined by 6.27% and silver by 9.22%.
The chart below shows the normalized rates of metals during month up to date (normalized to 100 as of April 30th).
The ratio between the two metals declined on Thursday to 55.4. During the month the ratio rose by 3.24% as silver has moderately under-performed gold during the month. In the chart below are the developments of this ratio during May.
Despite the sharp turns and movements in the bullion rates in recent weeks, during May the volatility of precious metals prices hasn’t changed much from their previous months as their standard deviations (daily percent changes) during the month are very similar to the standard deviations in previous months.
In the latest report the jobless claims edged down to 370,000; this weekly report continue to suggest the U.S economy from the perspective of jobless claims isn’t progressing. This news might have been among the factors to help rally bullion prices and curb the fall in the Euro/USD during yesterday’s trading.
Core Durable Goods Edged Up in April
This report may indirectly presents the developments in U.S. demand for commodities.
According to recent report for April, which was published yesterday, new orders of manufactured durable goods rose by $0.3 billion to $215.5 billion; on the other hand Non-defense new orders for capital goods decreased $0.1 billion to $70.0 billion. This mixed signal in the report might have had little effect on the financial markets as there weren’t sharp changes in new orders.
On Today’s Agenda
U.S Consumer Sentiment by UoM: University of Michigan will release its revised consumer sentiment index.
German Consumer Climate: Gfk group will release their German consumer climate index. If this report will be positive it might also have a positive effect on the Euro;
Currencies / Gold & Silver Market – May Update
The Euro/U.S Dollar continued to descend on Thursday by 0.41% to 1.2533 – the lowest rate in nearly two years. During the month (UTD) the Euro/U.S Dollar tumbled down by 5.33%. On the other hand the some “risk currencies” such as the Australian dollar appreciated during Thursday against the USD. Nevertheless if the U.S dollar will continue to appreciate against the Euro, bullion might also continue to trade down. Currently the Euro is rising against the USD.
Current Gold and Silver Prices as of May 25th
Gold (June 2012 delivery) is traded at $1,563.3 per t oz. a 0.22% increase as of 13:22*.
Silver (June 2012 delivery) is at $28.22 per t oz – a $0.063 increase as of 13:23*.
Daily Outlook for May 25th
Bullion changed direction and increased during yesterday along with other commodities prices such as oil price. The recent U.S reports didn’t show much progress as both the Jobless claims and durable goods didn’t improve by much from their respective previous reports. The speculation revolving around Greece is likely to keep eclipsing other news items in the days to come including during the last day of the week. Finally the upcoming reports from the U.S and Germany might play a small role in affecting prices if they will present sharp shifts or surprises.
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