The prices of gold and silver rallied in the past three business days and slowly recovered from their sharp drop in the prices of precious metals during December. The low volatility is likely to continue in the coming days. On today’s agenda: Japan Current Account, GB CPI, EU Industrial Production, U.S. Retail Sales Report, and U.S Producer Price Index.
Here is a short overview for precious metals for Tuesday, January 14th:
Gold and Silver – January Review
On Monday, gold slightly rose by 0.34% to $1,251.1; Silver, by 0.79% to $20.37. During January, gold rose by 4.06%; silver, by 5.34%. In the chart below are the normalized prices of bullion for the past several weeks (normalized to 100 as of December 18th). The prices of gold and silver have rallied in recent weeks.
The ratio between the two precious metals slipped on Monday to 61.42. During January, the ratio slipped by 1.21% as silver has moderately out-performed gold.
The gold and silver futures volumes of trade have declined and reached on Monday 146 thousand and 40 thousand, respectively. The volume of trade is likely to increase in the following days. The chart below shows the changes in the volume of trade in the past several weeks.
U.S. Retail Sales Report: This monthly report refers to December; in the last report regarding November, retail sales slightly rose by 0.7% (month-over-month); core retail sales rose by 0.4%;
U.S. PPI: This report shows the inflation rate from the producers’ side; it will refer to December 2013. In the last report regarding November, this index for finished goods slightly fell by 0.1% compared with November’s level; the core PPI inched up by 0.1%; this news might affect the USD;
Japan Current Account: This report will refer to the shifts in the gap between exports and imports for Japan during last month; this news may affect the Japanese Yen;
GB CPI: In the previous monthly update regarding November 2013, the CPI inched down to an annual rate of 2.1%; if the inflation rate continues its downward trend, it may eventually affect the BOE’s monetary policy;
EU Industrial Production: This report will show the monthly shifts in the industrial production as of December; as of November, the production fell by 1.1%; this report may affect the Euro currency;
Australia Employment Update: In the recent report regarding November 2013 the rate of unemployment inched up to 5.8%; the number of employed (seasonally adjusted) increased by 21,000 people. This report could affect the Aussie dollar (see here the recent report);
Currencies / Precious Metals Correlations – January Update
On Monday, the Eur/USD currency pair inched up by 0.01% to 1.3671. During January, the Eur/USD decreased by 0.53%. Further, other currencies such as the Japanese yen and Aussie dollar sharply appreciated yesterday against the U.S dollar by 1.13% and 0.66%, respectively. The correlations among gold, silver and Aussie have slightly strengthened in recent days, e.g. the correlation between the AUD/USD and gold price is only 0.26 during December/January. This could suggest the changes of the gold and silver prices have little to do with the changes in the forex market.
Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):
00:50 – Japan Current Account
09:30 – GB CPI
10:00 – EU Industrial Production
13:30 –U.S. Retail Sales Report
13:30 – U.S. Producer Price Index
02:30 – Australia Employment Update
09:00 – ECB Monthly Bulletin
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