Precious metals prices changed direction and bounced back on Wednesday. Their rally didn’t coincide with the developments in the forex markets, in which the U.S dollar slightly appreciated against leading currencies such as Euro and Aussie dollar. In the U.S, the producer price index report was published. Based on the latest update, the PPI for July remained unchanged. Moreover, the PPI except food and energy inched up by 0.1%. This could suggest that today’s CPI report will reveal little change to the U.S inflation. Will gold and silver continue their rally? On today’s agenda: GB Retails Sales, U.S. Jobless Claims, U.S Core Consumer Price Index, U.S. TIC Long Term Purchases, and Philly Fed Manufacturing Index.
Here is a short outlay for precious metals for Thursday, August 15th:
Gold and Silver Prices Review – August Update
On Wednesday, gold bounced back and increased by 0.97% to $1,334.10; Silver also sharply rose by 2.08% to $21.79. During August, gold rose by 1.65%; silver rallied by 11%.
In the chart below are the normalized prices of gold and silver for 2013 (normalized to 100 as of July 10th). The prices of gold and silver have bounced back during August.
Gold and silver futures volumes of trade remained low and reached on Wednesday 127 thousand and 66 thousand, respectively. If the volume will continue to remain low, this could suggest the odds of sudden sharp movement in the prices of gold and silver due to low volume will diminish.
See here the weekly outlook for gold and silver for August 12-16.
On Today’s Agenda
U.S. Jobless Claims Weekly Report: In the last report the jobless claims rose by 5k to reach 333k; the next weekly report may affect the direction of precious metals;
U.S Core Consumer Price Index: According to the U.S Bureau of Labor statistics, during June, the CPI rose by 0.5% (month-over-month); the core CPI edged up by 0.2%; the core index increased over the past twelve months by 1.6%.
GB Retails Sales: This report shows the changes in the retails sales in Great Britain for July 2013. It may affect the path of the British Pound currency. In the previous report regarding June 2013, retails sales slightly rose by 0.2%;
U.S. TIC Long Term Purchases: The Treasury International Capital monthly report will present the shifts the purchases and sales of US long term treasuries for June 2013. In the recent report regarding May 2013, the net foreign sales of U.S Treasuries longer-term notes reached a deficit of $27.2 billion;
Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the recent survey regarding July, the growth rate rose again from +12.5 in June to +19.8 in July. If the index will continue to recover, it may positively affect not only U.S Dollar but also gold and silver prices (the previous Philly Fed review);
Currencies / Precious Metals – August Update
The Euro/ USD currency pair inched down again on Wednesday by 0.06% to 1.3255. During the month (up-to-date), the Euro/USD slipped by 0.35%. Moreover, other currencies such as the Aussie dollar also slightly depreciated yesterday against the U.S dollar by 0.09%. The correlations among gold, Euro and Aussie dollar sharply weakened, e.g. the correlation between the Euro/USD and gold price was 0.45 during July-August.
Current Gold and Silver Rates as of August 15th
Gold (short term delivery) is traded at $1,338.70 per t oz. a $5.3 or 0.40% increase as of 10:41*.
Silver (short term delivery) is at $22.08 per t oz – a 1.32% increase as of 10:41*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – GB Retails Sales
13:30 – U.S. Jobless Claims Weekly Report
13:30 – U.S Core Consumer Price Index
14:00 – U.S. TIC Long Term Purchases
15:00 – Philly Fed Manufacturing Index
10:00 – Euro Area CPI
13:30 – Canada Manufacturing Sales
13:30 – U.S. Housing Starts
13:30 – U.S. Building Permits
14:55 – UoM Consumer Sentiment
For further reading: