Gold and silver declined for the third consecutive day. The testimony of Bernanke didn’t reveal the next move of the FOMC. The U.S housing starts report came out yesterday: housing starts rose by 6.9% during June (M-o-M). This report may have contributed to the decline in bullion rates. Currently gold and silver are rising. On today’s agenda: U.S. Jobless Claims Weekly Report, Philly Fed Manufacturing Index, and U.S. Existing Home Sales.
Here is a short outlook for precious metals for Thursday, July 19th:
Precious Metals – July Update
Gold decreased again on Wednesday by 1.18% to $1,570.8; Silver also fell by 0.81% to $27.1. During July, gold declined by 2.08% and silver by 1.87%.
The chart bellow presents the normalized rates of these precious metals during the month (normalized to 100 as of June 29th).
On Today’s Agenda
Philly Fed Manufacturing Index: In the previous June survey, the growth rate declined from -5.8 in May to -16.6 in June. If this trend will continue this index may affect U.S Dollar and precious metals prices (the recent Philly Fed review);
U.S. Jobless Claims Weekly Report: in the latest report the jobless claims decreased by 26k to 350,000; this upcoming weekly report may affect the U.S dollar and consequently bullion prices;
U.S. Existing Home Sales: in the previous report for May 2012 the number of homes sold declined by 1.5% to a seasonally adjusted annual rate of 4.55 million home sales; if this trend will continue it may curb the rally the U.S dollar;
Currencies / Gold & Silver Market – July Update
The Euro/US Dollar changed direction and edged down on Wednesday by 0.09% to 1.2283. During the month (UTD) the Euro/USD declined by 3.02%. Alternatively, other exchange rates such as the Australian dollar appreciated on Wednesday against the USD by 0.47%. The linear correlation between gold and Euro/USD is 0.70 (daily percent changes, for the last few weeks). If the Euro/USD and AUD/USD will continue to decline, they may adversely affect precious metals rates. Currently, the Euro/USD is falling.
Current Gold and Silver Rates as of July 19th
Gold (August 2012 delivery) is traded at $1,581.4 per t oz. a $8.1 or 0.51% decrease as of 08:13*.
Silver (August 2012 delivery) is at $27.225 per t oz – a $0.091 or 0.33% decrease as of 08:13*.
Daily Outlook for July 19th
Gold and silver continued to trade down for the third consecutive day. Following Bernanke’s testimonies at the Hill as he didn’t commit to another stimulus plan nor did he take this option off the table, bullion rates continued to dwindle. The U.S housing starts rose during June and thus may have contributed to the decline in precious metals rates. The U.S reports to be published today including Philly Fed, existing home sales and jobless claims may affect U.S stocks, forex and commodities markets. Finally, if the major exchange rates including Euro, Aussie dollar and Canadian dollar will change direction and appreciate against the USD, this could curb the decline in bullion and perhaps even change the direction of bullion rates to edge up.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
13:30 – U.S. Jobless Claims Weekly Report
15:00 – Philly Fed Manufacturing Index
15:00 – U.S. Existing Home Sales
15:30 – EIA U.S. Natural Gas Storage Update
09:30 – Great Britain Net borrowing
13:00 – Canada’s Core CPI
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