Gold and silver didn’t do much on Monday and gold slightly declined, while silver rose again. Their small movement coincides with the developments in the forex markets as the US didn’t move much against leading currencies. In U.S, the core durable goods report came out yesterday: New orders of durable goods decreased by 7.3% during last month compared to June. This news may pull back the U.S dollar and thus may keep the rally of precious metals. Will gold and silver further rise? On today’s agenda: German Ifo Business Climate Index and U.S Consumer Confidence.
Here is a short outlay for precious metals for Tuesday, August 27th:
Gold and Silver Prices Review – August Update
On Monday, gold slipped by 0.17% to $1,392.60; Silver rose by 1.15% to $24.01. During August, gold increased by 6.11%; silver rallied by 22.33%.
In the chart below are the normalized prices of precious metals for 2013 (normalized to 100 as of July 31st). The prices of gold and silver have rallied during August.
The ratio between the two precious metals declined again on Monday to 58.0. During August, the ratio fell by 13.26% as silver has out-performed gold.
The gold and silver futures volumes of trade have declined in recent days and reached on Monday 108 thousand and 81 thousand, respectively. For gold, the volume is at its lowest since the beginning of the month. If the volume will remain low this week, this could suggest the odds of sudden sharp move in the prices of gold and silver due to low volume will diminish.
See here the weekly outlook for gold and silver for August 26-30.
On Today’s Agenda
German Ifo Business Climate Index: This index comprises the developments (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of August. In the recent report for July 2013, the business climate index inched up from 105.9 in June to 106.2 in July;
U.S Consumer Confidence: Based on the recent monthly update, for May, the consumer confidence index declined to 80.3 (month-over-month). The current expectations are that the July index may change direction and rise; this report might affect commodities prices;
Currencies / Precious Metals– August Update
On Monday, the Euro/ USD currency pair slightly fell by 0.11% to 1.3368. During the month, so far, the Euro/USD edged up by 0.50%. Further, other currencies such as the Canadian dollar also depreciated yesterday against the U.S dollar by 0.05%. The correlations among gold, Euro and Aussie dollar slightly weakened in the past several weeks, e.g. the correlation between the USD/CAD and gold price is -0.38 during August. The chart below shows the correlations among the leading currencies pairs and precious metals during the month.
Current Gold and Silver Rates as of August 27th
Gold (short term delivery) is traded at $1,402.60 per t oz. a $9.50 or 0.68% increase as of 08:58*.
Silver (short term delivery) is at $24.19 per t oz – a 0.56% increase as of 08:58*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:00 – German Ifo Business Climate Index
15:00 – U.S Consumer Confidence
09:00 – Gfk German Consumer Climate Survey
09:00 – Euro Area Monetary Development
12:45 –BOE Governor Carney Speaks
15:00 – U.S. Pending Home Sales
02:30 – Australia Private New Capital Expenditure
For further reading: