Gold and silver continue to zigzag and they bounced back yesterday from the recent fall. This recent descent of precious metals didn’t seem to stem from the news regarding the progress of the U.S economy: the final estimate of the U.S GDP growth rate came out yesterday and showed no change – i.e. the growth rate remained 2.5%; U.S jobless claims slipped by 5k to reach 305k; pending home sales index declined again to reach 107.7 in August. These findings were neither positive nor negative enough to suggest a shift in market sentiment towards the progress of the U.S economy. The unclear trend in gold and silver prices in the past several days might suggest bullion investors aren’t certain regarding the future progress of gold and silver. Will precious metals prices continue to seek direction? On today’s agenda: KOF Economic Barometer, ECB President Speaks, U.S Personal spending, and UoM Consumer Sentiment.
Here is a short overview for precious metals for Friday, September 27th:
Gold and Silver Prices Review – September Update
On Thursday, gold fell by 0.92% to $1,323.6; Silver also decreased by 0.55% to $21.72. During September, gold decreased by 5.17%; silver, by 7.49%. In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of August 30th). The prices of gold and silver didn’t have a clear trend in the past several days.
The ratio between the two precious metals slipped on Thursday to 60.94. During September, the ratio increased by 2.50% as silver has under-performed gold.
See here the weekly outlook for gold and silver for September 23-27.
On Today’s Agenda
UoM Consumer Sentiment (revised):University of Michigan will publish its revised consumer sentiment monthly update; this survey could provide information regarding the recent changes in U.S consumers’ sentiment; according to the latest report, the sentiment index decreased to 82.1;
KOF Economic Barometer: This monthly report estimates the progress of the Swiss economy in the upcoming months;
ECB President Speaks: Mario Draghi will give a speech at BocconiUniversity, in Milan. His words could move the markets if they refer to any potential changes in ECB’s policy;
U.S Personal spending: This monthly report will pertain to the shifts in income and outlays in the U.S during August; in the last report regarding July the personal income edged up by 0.1%;
Currencies / Precious Metals– September Update
On Thursday, the Euro/ USD currency pair changed direction again and also decreased by 0.27% to 1.3489. During the month, so far, the Euro/USD rose by 2.02%. Moreover, other currencies such as the Aussie dollar and Yen also slightly depreciated yesterday against the U.S dollar by 0.05% and 0.57%, respectively. The correlations among silver, Euro and Canadian dollar have weakened during the month, e.g. the correlation between the USD/Yen and gold price is only 0.31 during September. These findings suggest the shifts in the forex markets have little effect on the developments in the prices of gold and silver. The chart below shows the changes in the correlations among precious metals prices changes and leading currencies pairs.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
Today
08:00 – KOF Economic Barometer
10:00 – ECB President Speaks
13:30 – U.S Personal spending
14:55 – UoM Consumer Sentiment
For further reading: