Gold and silver continued their rally from Friday and spiked on the first business day of the week. Their rally didn’t coincide with the developments in the forex markets as the US slightly strengthened against leading currencies such as Japanese yen. In Japan, the GDP for the second quarter grew by 2.6% (in annual terms), which was lower than expected. This could mean the government along with Bank of Japan may need to implement additional steps to jump-start the economy. In the U.S, the recent update to the federal budget revealed a $97 billion rise in deficit during July. Nonetheless, the current deficit grew by a rate which is 38% slower than last year’s fiscal year. Will gold and silver continue their rally? On today’s agenda: U.S. Retail Sales Report, EU Industrial Production, German ZEW economic sentiment, GB CPI, and Minutes of Bank of Japan’s Monetary Policy Meeting.
Here is a short outlay for precious metals for Tuesday, August 13th:
Gold and Silver Prices Review – August Update
On Monday, gold jumped by 1.71% to $1,334.90; Silver also spiked by 4.61% to $21.34. During August, gold rose by 1.71%; silver rallied by 8.72%.
In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of July 10th). The prices of gold and silver have bounced back during August.
The gold and silver futures volumes of trade have fallen in recent days and reached on Friday 104 thousand and 67 thousand, respectively. These numbers are lower than the volume traded during the second half of July. If the volume will rally this week, this could suggest the odds of sudden sharp changes in the prices of gold and silver due to high volume will increase.
See here the weekly outlook for gold and silver for August 12-16.
On Today’s Agenda
U.S. Retail Sales Report: this monthly report presents the changes in retail sales and food services for July; in the previous report regarding June, the retail sales rose again by 0.6% from the last month; this report may affect the US dollar and consequently the prices of bullion;
Minutes of Bank of Japan’s Monetary Policy Meeting: Bank of Japan didn’t change it monetary policy. The minutes may offer insight regarding behind the future plans of BOJ; this news may affect the Japanese yen and consequently commodities;
GB CPI: In the previous report regarding June 2013, the CPI increased again to an annual rate of 2.9%; if the inflation rate will continue to advance it may eventually affect the decision of BOE regarding changes to its monetary policy;
German ZEW economic sentiment: The forthcoming report will refer to the ZEW indicator of economic sentiment for Germany for July. In June, the ZEW indicator for Germany decreased to 36.3 points; if Germany’s economic sentiment will keep falling, the Euro will plausibly weakened against other currencies including the US dollar;
EU Industrial Production: this report will show the monthly changes in the industrial production as of July; as of June, the production fell by 0.3%; this report may affect the euro/usd;
Currencies / Precious Metals– August Update
The Euro/ USD currency pair slipped again on Monday by 0.31% to 1.33. During the month so far, the Euro/USD edged down by 0.02%. Further, other currencies such as the Aussie dollar and Japanese yen also depreciated yesterday against the U.S dollar by 0.63% and 0.72%, respectively. The correlations among gold, Euro and Aussie dollar slightly weakened but remained robust, e.g. the correlation between the Euro/USD and gold price is 0.45 during July-August.
Current Gold and Silver Rates as of August 13th
Gold (short term delivery) is traded at $1,332.30 per t oz. a $1.9 or 0.14% decrease as of 01:22*.
Silver (short term delivery) is at $21.26 per t oz – a 0.39% decrease as of 01:22*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
00:50 – Minutes of Bank of Japan’s Monetary Policy Meeting
09:30 – GB CPI
10:00 – German ZEW economic sentiment
10:00 –EU Industrial Production
13:30 –U.S. Retail Sales Report
09:30 – Great Britain Claimant Count Change
09:30 –MPC Asset Purchase and Rate Votes
10:00 –EU Second Quarter GDP 2013
Tentative – German 10 Year Bond Auction
13:30 – U.S. Producer Price Index
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