The prices of gold and silver tumbled down on Tuesday; their recent decline coincided with the drop of the price of oil over 2%. Some suspect the developments in Syria have affected not only crude oil prices but also other commodities prices such as gold and silver prices. This news may have had some effect on commodities prices, but I still think the changes in gold and silver are related to the developments in the U.S economy and speculations around the future move of the FOMC regarding its asset purchase program. Conversely, most leading currencies such as Euro and Aussie dollar rallied against the USD. Despite the recent fall of gold and silver, it’s still hard to see a trend forming. Will gold and silver keep changing directions on a daily basis until next week’s FOMC meeting? On today’s agenda: Great Britain Claimant Count Change, German 10 Year Bond Auction, and U.S 10 Year Bond Auction.
Here is a short review for precious metals for Wednesday, September 11th:
Gold and Silver Prices Recap – September Update
On Tuesday, gold tumbled down by 1.64% to $1,363.70; Silver also decreased by 2.96% to $22.98. During September, gold decreased by 2.30%; silver, by 2.13%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of August 9th). The prices of gold and silver changed direction and tumbled down yesterday after they had rallied during August.
The gold and silver futures volumes of trade have fallen in recent days and reached on Monday 85 thousand and 31 thousand, respectively. For gold, the volume yesterday was at its lowest since June. If the volume picks up this week, this could suggest the odds of sudden sharp change in the prices of gold and silver due to high volume will rise.
St. Deviation of Gold and Silver
Due to the sharp changes in the bullion markets during the month, the volatility of precious metals prices increased compared to previous month: The standard deviations of gold and silver (daily percent changes) were higher than the standard deviations in August.
See here the weekly outlook for gold and silver for September 9-13.
On Today’s Agenda
U.S 10 Year Bond Auction: the U.S government will also issue its monthly bond auction; in the previous auction, which was held at the first week of August, the average rate reached 2.62%;
Great Britain Claimant Count Change: As of the previous month, the number of unemployed in GB had fallen by 29.2k; the rate of unemployment remained unchanged at 7.8%;
German 10 Year Bond Auction: The German government will issue its monthly bond auction; in the last bond auction, which was held during mid-August, the average rate reached 1.80% – the highest rate this year;
Currencies / Bullion– September Update
On Tuesday, the Euro/ USD currency pair slightly rose by 0.58% to 1.3255. During the month, so far, the Euro/USD edged up by 0.25%. Moreover, other currencies such as the Aussie dollar and Canadian dollar also appreciated yesterday against the U.S dollar by 0.47% and 0.35%, respectively. The correlations among gold, Euro and Aussie dollar slightly weakened in the past several weeks, e.g. the correlation between the Euro/USD and gold price is 0.29 during August-September. The table below shows the relations between precious metals prices and leading currencies pairs.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – Great Britain Claimant Count Change
Tentative – German 10 Year Bond Auction
Tentative – U.S 10 Year Bond Auction
02:30 – Australia Employment Update
09:00 – ECB Monthly Bulletin
10:00 – EU Industrial Production
13:30 – U.S. Jobless Claims Weekly Report
19:00 – U.S. Federal Budget Balance
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