Gold and silver prices remained nearly unchanged on the first day of the week. The low volatility in the precious metals markets was also the case in other commodities, foreign exchange and stock markets. This low volatility is likely to continue in the days to follow. The EU ministers of finance finally reached an agreement regarding the Greek bailout. One of the details agreed upon was that Greece will cut its debt/GDP ratio to 124% by the year 2020. Greece was also cleared to receive 34.4 billion euro as a loan during December. This news is likely to pull up the Euro. Currently, gold and silver prices are rising. On today’s agenda: U.S Core Durable Goods, GB revised GDP Q3 2012, and U.S Consumer Confidence.
Here is a short outlook for precious metals for Tuesday, November 27th:
Precious Metals –November Update
On Monday, the price of gold edged down by 0.1% to $1,749.6; Silver price increased by 0.06% to $34.14. During the month, gold rose by 1.77%; silver, by 5.63%.
As seen below, the chart shows the changes in the normalized prices of precious metals during the past several weeks (normalized to 100 as of October 31st). During recent days the prices of precious metals were traded up.
The ratio between the two precious metals continued to fall on Monday to 51.25. During the month the ratio declined by 3.65% as gold slightly under-performed silver.
On Today’s Agenda
U.S Core Durable Goods: This report may indirectly indicate the shifts in U.S. demand for commodities. As of September, new orders of manufactured durable goods declined by $19.6 billion to $218.2 billion; if this report will show a rise in new orders then it could pull up not only the US dollar but also bullion prices;
U.S Consumer Confidence: according to the previous monthly report, the consumer confidence index rose again in October (M-o-M). The current expectations are that the November index may change direction and slide down;
GB revised GDP Q3 2012: This report is the revised quarterly growth rate of the British economy for Q3 2012; according to the preliminary estimate the third quarter expanded by 1% (yearly scale);
Currencies / Bullion Market – November Update
The Euro/ USD remained unchanged on Monday at 1.2972. During the month, the Euro/USD rose by 0.1%. Moreover, some currencies such as Aussie dollar slightly appreciated yesterday against the USD by 0.04%. The recent decision of the EU ministers of finance regarding the Greek bailout is likely to pull up the Euro and other “risk currencies”. As seen in the chart below, the correlations among gold, Euro and Aussie are still strong and positive: during November, the linear correlation between gold and Euro /USD reached 0.56 (daily percent changes); the linear correlation between the silver and Aussie dollar/ USD was 0.54 (daily percent changes). Thus, if the Euro and other risk currencies will continue to trade up against the USD, they are likely to pull up gold and silver.
Current Gold and Silver Rates as of November 27th
Gold (short term delivery) is traded at $1,750.3 per t oz. a $.0.7 or 0.04% increase as of 05:38*.
Silver (short term delivery) is at $34.3 per t oz – a $0.07 or 0.21% increase as of 05:38*.
Daily Outlook for November 27th
The prices of gold and silver remained nearly unchanged yesterday much like other commodities and in the foreign exchange markets. The low volatility might continue. Nonetheless, the prices of precious metals might resume their last week’s upward trend in the days to follow. The recent agreement struck in the EU Summit might pull up not only the Euro and related risk currencies but also gold and silver.
The upcoming Japanese elections to be held next month could affect the yen which could eventually affect other related currencies. The upcoming reports regarding U.S consumer confidence and core durable goods could affect the USD and by extension bullion prices. If these reports will show little growth they could adversely affect major commodities prices.
Finally, if the Euro and other “risk currencies” will continue to trade up against the USD, then they are likely to positively affect precious metals.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – GB revised GDP Q3 2012
13:30 – U.S Core Durable Goods
15:00 – U.S Consumer Confidence
09:00 – Euro Area Monetary Development
15:00 – U.S. New Home Sales
17:15 – SNB Chairman Jordan’s Speech
00:30 – Australia Private New Capital Expenditure
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