The prices of gold and silver rallied yesterday. In the U.S several reports came out yesterday: housing started spiked by 12.1% in December; jobless claims declined by 37k to reach 335k during last week; the Philly fed survey for January declined to an index of -5.8. This mixed signal regarding the progress of the U.S economy may have resulted in the mixed trend in the foreign exchange market. In China the fourth quarter GDP expanded by an annual pace of 7.9%, which is higher than in the previous quarter. This news might help rally commodities prices during the day. The Asian stock markets are currently rising. Moreover, currently, the prices of gold and silver are also increasing. On today’s agenda: GB Retails Sales, Canadian Manufacturing Sales, and UoM Consumer Sentiment.
Here is a short outlook for precious metals for Friday, January 18th:
Precious Metals – January Update
On Thursday, the price of gold rose by 0.45% to $1,690.8; Silver price also rose by 0.85% to $31.78. During January, gold increased by 0.96%; silver, by 5.34%.
As seen below, the chart presents the changes in the normalized prices of precious metals during the month (normalized to 100 as of December 30th). During recent days silver and gold had a moderate upward trend.
The ratio between the two precious metals slipped again on Thursday to 53.2. During the month the ratio fell by 4.2% as gold under-performed silver.
On Today’s Agenda
GB Retails Sales (December 2012): This report may affect the path of the British Pound currency. In the recent report regarding November 2012, retails sales remained unchanged;
Canadian Manufacturing Sales: This survey examines the changes (on a monthly basis) of Canada’s manufacturing sales. In the previous report the manufacturing sales declined by 1.4%; if this trend will continue, it could pull down the Canadian dollar;
UoM Consumer Sentiment (preliminary): University of Michigan will publish its preliminary consumer sentiment update; this survey could offer an insight to latest developments in U.S consumers’ sentiment; according to the previous report, the sentiment index fell to 74.5;
Currencies / Bullion Market – January Update
The Euro/ USD rose on Thursday by 0.67% to 1.3376. During the month, the Euro/USD increased by 1.39%. Alternatively, some currencies such as Aussie dollar depreciated yesterday against the USD by 0.25%. The yen also sharply depreciated vs the USD by 1.7%. This mixed trend of “risk currencies” may have contributed to the low volatility of precious metals. Furthermore, the correlations among gold, Euro remained weaker than in the past: during the month, the linear correlation between gold and Euro/USD reached 0.07 (daily percent changes); the linear correlation between the gold and AUD /USD reached 0.34 (daily percent changes). Nonetheless, if the Euro and other “risk currencies” will rise against the USD, they are might positively affect bullion rates.
Current Gold and Silver Rates as of January 18th
Gold (short term delivery) is traded at $1,690 per t oz. a $0.2 or 0.01% increase as of 07:00*.
Silver (short term delivery) is at $31.87 per t oz – a $0.05or 0.16% increase as of 07:00*.
(* GMT)
Daily Outlook for January 18th
Prices of precious metals resumed their upward trend yesterday and they continue their rally today. The recent news of China’s GDP may positively influence commodities traders. On the other hand, the sharp rise in the U.S housing market may curb the rally of precious metals during the day. The upcoming reports including: UoM Consumer Sentiment, Canadian Manufacturing Sales and GB Retails Sales could affect USD, CAD and British Pound, respectively. This, in turn, could also affect precious metals rates. Finally, if the Euro and other “risk currencies” will rise against the USD, they might positively affect gold and silver.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
Today
09:30 –Retails Sales GB (December 2012)
13:30 – Canadian Manufacturing Sales
14:55 – UoM Consumer Sentiment
For further reading: