Gold and silver prices increased again on Friday, and also edged up during yesterday’s trading in Asia. Will this positive trend continue in today’s trading? Currently precious metals prices are rising. On today’s agenda: U.S consumer confidence report and Australia’s retail sales report.
Here is a short outlook for gold and silver for Tuesday, May 29th:
Precious Metals – May Update
Gold price increased again on Friday by 0.28% to $1,571.2; silver also increased by 0.81% to $28.39. During the month gold declined by 5.59% and silver by 8.48%.
The chart below presents the normalized rates of these metals during the past couple of weeks (normalized to 100 as of May 15th).
The ratio between the two metals declined on Friday to 55.35. During the month the ratio rose by 3.16% as silver has moderately under-performed gold during the month.
American Stock Markets / Gold & Silver – May
The S&P500 index edged down on Friday by 0.22% to 1,317.82. During the month S&P500 index traded down by 5.73%. Despite the drop in both gold price and S&P500 index in similar rates during the month so far, their linear correlation negative and weak as indicated in the chart below. During May the linear correlation was -0.214 with gold and -0.279 with silver after the correlation used to be strong and positive. This shift could suggest the recent drop in gold and silver is less related (than one could consider) with the decline in the U.S stock markets. The negative correlation could be due to the difference in price developments between bullion rates and S&P500 in the past couple of weeks.
On Today’s Agenda
U.S Consumer Confidence: according to the previous report, the consumer confidence index remained flat during April. The current expectations are that the April index may decline; this report might affect commodities rates;
Australian Retail Sales: This monthly report will pertain to the developments in Australia’s retail sales report for April 2012. The retail sales (seasonally adjusted) rose by 0.9% in March; this news may affect the strength of the Aussie dollar, which is strongly linked with bullion rates;
Currencies / Gold & Silver Market – May Update
The Euro/U.S Dollar changed direction and traded up on Monday by 0.2% to 1.2542. During the month (UTD) the Euro/U.S Dollar declined by 5.3%. Furthermore, “risk currencies” such as the Australian dollar also appreciated during Monday against the USD. If the U.S dollar will continue to trade down against the Euro, bullion might also rally. Currently the Euro is rising against the USD.
Current Gold and Silver Prices as of May 29th
Gold (June 2012 delivery) is traded at $1,576.1 per t oz. a $4.9 or 0.31% increase as of 23:43*.
Silver (June 2012 delivery) is at $28.435 per t oz – a $0.049 or 0.17% increase as of 23:43*.
(* GMT)
Daily Outlook for May 29th
Precious metals prices rose again during Friday and most of Monday’s trading (even though it was recorded for the trading in CME). If the Euro will change direction and start to pick up, this could also help pull up bullion rates. The recent momentum in which both metals have increased might continue especially since there aren’t too many news items on the today’s agenda to influence bullion traders. The upcoming US report about consumer confidence might affect not only forex but also commodities prices.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
15:00 – U.S Consumer Confidence
02:30 – Australian Retail Sales
Tomorrow
08:00 – KOF Economic Barometer
09:00 – Euro Area Monetary Development
Tentative – Italian 10 Year Bond Auction
15:00 – U.S. Pending Home Sales
16:30 – ECB President Draghi Speaks
For further reading: