The prices of gold and silver fell again yesterday. For gold this was the sixth consecutive business day in which it has declined. For silver it was the third straight day. Their decline coincided with the devaluation of the Euro and Aussie dollar against the USD. Yesterday, several U.S reports were published: The Philly Fed index for May declined; the consumer price index declined again by 0.4% in April; jobless claims rose by 32k to 360k; housing starts tumbled down by 16.5% in April compared to March. These news items weren’t positive and may have contributed to the fall of equity markets yesterday. Will gold and silver further decline today? On today’s agenda: Canada’s core CPI and UoM Consumer Sentiment. Tomorrow Bernanke will give a speech.
Here is a short outlook for precious metals for Friday, May 17th:
Precious Metals – May Update
On Thursday, gold fell again by 0.67% to $1,386.9; Silver inched down by 0.01% to $22.65. During the May, gold declined by 5.79%; silver, by 6.19%.
In the chart below are the normalized rate of gold and silver for 2013 (normalized to 100 as of April 30th). The prices of gold and silver have fallen in recent weeks.
The ratio between the two precious metals decreased on Thursday to 61.23. During the month, the ratio rose by 0.42% as gold slightly outperformed silver.
On Today’s Agenda
Canada‘s core CPI: This report will refer to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for April 2013. Based on the previous Canadian CPI report for March 2013, the core CPI slightly increased by 0.2% during the month. This report might affect the Canadian dollar, which is also strongly correlated with commodities rates;
UoM Consumer Sentiment (preliminary):University of Michigan will publish its preliminary consumer sentiment monthly report; this survey could offer an insight to latest developments in U.S consumers’ sentiment; according to the recent update, the sentiment index slightly rose to 72.3;
Saturday
Bernanke’s Speech: Chairman of the Federal Reserve Ben Bernanke will talk in Bard College, in New York. The title of his speech is “Economic Prospects for the Long Run “. Following the latest FOMC meeting from earlier this month, if the Chairman of Fed will provide some insight regarding the future steps of the FOMC this could stir up the precious metals market;
Currencies / Bullion Market – May Update
The Euro/ USD declined again on Thursday by 0.26% to 1.2887. During the month, the Euro/USD decreased by 2.13%. Conversely, other currencies such as the Canadian dollar and Aussie dollar slightly rallied yesterday against the U.S dollar by 0.09% and 0.23%, respectively. The correlations among gold, Canadian dollar and Aussie dollar are still mid-strong: during the past several weeks the linear correlation between gold and Euro/USD reached 0.35 (daily percent changes); the linear correlation between the gold and AUD/USD was 0.62 (daily percent changes). If these correlations will hold, the Aussie, Canadian dollar and Euro are likely to partly affect bullion rates.
Current Gold and Silver Rates as of May 17th
Gold (short term delivery) is traded at $1,375.1 per t oz. an $11.8 or 0.85% decrease as of 10:54*.
Silver (short term delivery) is at $22.42 per t oz – a 1.05% decrease as of 10:54*.
(* GMT)
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
Today
13:00 – Canada’s core CPI
14:55 – UoM Consumer Sentiment
15:00 – Bernanke’s Speech
For further reading: