Gold and silver prices resumed their downward trend and declined during yesterday’s trading. The disappointing U.S consumer confidence report didn’t seem to curb the decline in bullion rates but may have adversely affected energy commodities prices. Currently precious metals prices are rising. On today’s agenda: KOF Economic Barometer, Euro Area Monetary Development, Italian 10 Year Bond Auction (update: the Italian bond sales isn’t going well as the 10 yr bond yield reached 6.03 up from last bond sale’s yield of 5.84) U.S. Pending Home Sales (update: home sales declined in April) and ECB President Draghi will give a speech.
Here is a short outlook for gold and silver for Wednesday, May 30th:
Precious Metals – May Update
Gold price decreased on Tuesday by 1.29% to $1,551; silver also decreased by 2.1% to $27.79. During the months so far gold traded down by 6.8% and silver by 10.4%.
The chart below shows the normalized rates of these metals during the past couple of weeks (normalized to 100 as of May 15th).
Euro Area Monetary Development: In the previous March report, the annual growth rate for M3 sharply rose to 3.2%. The M1 also increased to 2.7%. If the M1 and M3 will continue to rise this could serve as another indicator for the rising inflation pressures in the EU, and it may affect ECB’s monetary policy;
U.S. Pending Home Sales: This report present the changes in pending home sales in the U.S. for April 2012; in the previous report the pending home sales index increased by 4.1% (M-over-M). These data are another indicator for the development in America’s real estate market; based on last week’s results on housing sales (new and existing) the pending sales may continue to rise. In such a case US dollar may strengthen;
ECB President Draghi Speaks: The President of the European Central Bank, Mario Draghi will give a speech at European Policy Council in Brussels. If Draghi will refer to the ECB monetary policy vis-à-vis the European debt crisis, this might affect the financial markets;
Italian 10 Year Bond Auction: the Italian government will issue another bond auction; the previous bond auction, which was held a couple of weeks ago, went well as the rate reached 5.84%;
Currencies / Gold & Silver Market – May Update
The Euro/U.S Dollar resumed its descent and traded down on Tuesday by 0.31% to 1.2503. During the month (UTD) the Euro/U.S Dollar declined by 5.56%. Furthermore, “risk currencies” such as the Australian dollar also depreciated during Tuesday against the USD. If the U.S dollar will continue to trade up against the Euro, might also adversely affect bullion rates. Currently the Euro is falling against the USD.
Current Gold Price as of May 30th
Gold (June 2012 delivery) is traded at $1,556.4 per t oz. a $15.4 or 0.99% increase as of 17:41*.
Daily Outlook for May 30th
Precious metals prices rose during Thursday and Friday but resumed their descent on Tuesday. The ongoing decline in the Euro seems to drag along with it precious metals. If this trend will continue today, it could also adversely affect gold and silver. The speculation around future of Greece in the EU will likely to keep the Euro weak in the short term. The upcoming U.S pending home sales might slightly and adversely affect bullion and other financial markets if the report will continue to show progress in the housing market. The upcoming EU reports and ECB President Speech might also play a role in the forex and commodities markets during today’s trading.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
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
07:00 – German Retail Sales
10:00 – Euro Area Flash Estimate of Annual Inflation
13:00 – FOMC Member Pianalto Speaks
13:15 – ADP estimate of U.S. non-farm payroll
13:30 – U.S. Department of Labor– Jobless Claims Weekly Report
13:30 – Second Estimate of U.S GDP 1Q 2012
15:30 – EIA U.S. Natural Gas Storage Update
2:00– China Manufacturing PMI
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