Gold and silver, much like many other commodities, didn’t do much yesterday as both metals moved in different direction for the second consecutive day. The U.S jobless claims decline by 26 thousand to 350k. China’s GDP growth rate report for Q2 2012 came out and didn’t even meet expectations: China expanded by only 7.6 in annual terms during Q2. During Q1 China’s GDP grew by 8.1%. This low growth rate may adversely affect not only commodities rates but also exchange rates such as Aussie dollar. Moody’s decided to cut Italy’s bond rate by two levels. Currently gold and silver are rising. There are renewed talks over the possibility of the FOMC introducing another stimulus plan in the near future. On today’s agenda including: U.S core producer price index (update: U.S PPI edged up by 0.1% and core PPI by 0,2%) and UoM Consumer Sentiment.
Here is a short outlook for precious metals for Friday, July 13th:
Precious Metals – July Update
Gold decreased again on Thursday by 0.66% to $1,565.3. Silver on the other hand rose by 0.51% to $27.16. During July, gold declined by 2.42% and silver by 1.63%.
The chart bellow shows the normalized rates of these precious metals during July (normalized to 100 as of June 29th).
The ratio between the two precious metals sharply declined on Thursday to 57.63. During July the ratio edged down by 0.8% as has gold slightly under-performed silver.
On Today’s Agenda
U.S. Core Producer Price Index: In the previous report regarding May this index for finished goods fell by 1% compared with April’s rate and rose by 0.7% in the last 12 months; this news might affect gold and silver prices;
UoM Consumer Sentiment (preliminary): University of Michigan will issue its preliminary consumer sentiment survey; this report could offer another perceptive to recent changes in U.S consumers sentiment about the economy; last time the sentiment index fell to 74.1;
Currencies / Gold & Silver Market – July Update
The Euro/US Dollar fell on Thursday by 0.29% to 1.2203. During the month (UTD) the Euro/USD declined by 3.66%. Further, other exchange rates such as the Australian dollar also depreciated on Thursday against the USD by 1.1%. This trend might partly explain the decline gold prices. There is still a very strong and robust relation between Euro/USD and gold. The linear correlation between gold and Euro/USD is 0.65 (daily percent changes, for June/July). If the Euro/USD and AUD/USD will continue to decrease, it could pull down precious metals rates. Currently, the Euro/USD is falling.
Current Gold and Silver Rates as of July 13th
Gold (August 2012 delivery) is traded at $1,574.6 per t oz. a $9.3 or 0.59% increase as of 08:40*.
Silver (August 2012 delivery) is at $27.325 per t oz – a $0.164 or 0.6% increase as of 08:40*.
Daily Outlook for July 13th
Gold and silver moved in different direction for the second straight day but both metals haven’t done much during the week so far. On a monthly scale both precious metals slightly declined. The results of China’s GDP report might affect the commodities markets during the day. The disappointing growth raised the speculation that China might introduce a stimulus plan to jump-start its economy. The U.S core PPI could affect bullion rates as indicated above. Finally, if the Euro and other risk currencies such as AUD/USD will continue to fall, then they are likely to also drag down bullion prices.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
13:30 – U.S. Producer Price Index
14:55 – UoM Consumer Sentiment (preliminary)
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