The prices of gold and silver declined again for the fifth consecutive business day. Nonetheless, the weak precious metals prices haven’t coincided with the appreciation of major currencies such as Euro, Japanese yen, and Aussie dollar against the USD. In Bernanke’s recent speech in a teacher town hall in D.C he reiterated that the Fed will remain alert to prevent the U.S inflation from falling below 2%. Such dovish remarks might pull back up the prices of precious metals from their recent tumble. In the U.S the federal budget monthly update showed a $91 billion gain in the deficit during October. Will gold and silver recover from their recent decline? On today’s agenda: German Third Quarter GDP 2013, ECB Monthly Bulletin, Great Britain Retail Sales, U.S. Jobless Claims, Euro-Group Summits, Canadian Trade Balance, American Trade Balance, and Yellen’s Testimony.
Here is a short review of bullion prices for Thursday, November 14th:
Gold and Silver – November Review
On Wednesday, gold fell again by 0.22% to $1,268.4; Silver, by 1.62% to $20.44. During November, gold decreased by 4.17%; silver, by 6.37%. In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of October 15th). The prices of gold and silver have had a downward trend during November.
The gold and silver futures volumes of trade have slipped and reached on Wednesday 159 thousand and 100 thousand, respectively. The chart below shows the developments in the trade volume in the past month.
German Third Quarter GDP 2013: In the second quarter of 2013, Germany’s economy grew by 0.7%. The progress of the German economy is likely to affect the future of ECB monetary policy; if the growth rate doesn’t pick up, this may adversely affect Euro;
ECB Monthly Bulletin: This monthly report for October analyzes the economic shifts of the Euro Area such as the price stability, interest rate decisions and governments’ debt; this update may provide some perspective on the outlooks of the EU;
Great Britain Retail Sales: In the previous month, retail sales in Great Britain slightly rose by 0.6%; this report could affect the British pound;
U.S. Jobless Claims Weekly Report: In the last report the jobless claims fell by 9k to reach 336k; the next weekly update may affect the U.S dollar;
Euro-Group Summits: The summit will take place in Brussels as the EU ministers of finance and Euro-Group President may refer to the latest changes in Europe and the potential ramifications of the latest ECB rate drop;
Canadian Trade Balance: In the last report regarding August 2013, exports rose by 1.8% and imports grew by 2.1%; as a result, the trade balance’s deficit widened from $1.2 billion in July to $1.3 million in August; this report may affect the Canadian dollar, which tends to be linked with commodities;
American Trade Balance: This monthly report for September will show the developments in imports and exports of goods and services to and from the U.S, such as commodities such as oil and gas; based on the previous American trade balance update regarding June the goods and services deficit expanded to $38.8 billion;
Yellen’s Testimony: Vice Chairman of the Federal Reserve Janet Yellen will testify in front of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. This will be her confirmation hearing for her nomination of the Chairman of the Federal Reserve position;
Currencies / Precious Metals Correlations – November Update
On Wednesday, the Euro/ USD currency pair rose again by 0.39% to 1.3488. During November, the Euro/USD fell by 0.71%. Moreover, other currencies such as the Japanese yen and Aussie dollar appreciated yesterday against the U.S dollar by 0.38% and 0.62%, respectively. The correlations among gold, silver and Euro remained robust in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.72 during October/November.
Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):
06:30 –German Third Quarter GDP 2013
09:00 – ECB Monthly Bulletin
09:30 – Great Britain Retail Sales
13:30 – U.S. Jobless Claims
All Day – Euro-Group Summits
13:30 – Canadian Trade Balance
13:30 –American Trade Balance
15:00 – Yellen’s Testimony
All Day – ECOFIN Summit
10:00 – Euro Area CPI
13:30 – Canada Manufacturing Sales
14:15 –U.S Industrial Production
For further reading:
- Weekly Outlook of Financial Markets for November 11-15
- Will Gold Recover from its Recent Fall?
- Gold and Silver Outlook for November 2013
- Gold and Silver Weekly Forecast for November 11-15
- Gold and Silver Yearly Outlook For 2013
- Is the Golden Era of Gold Over?