Gold and silver continued their upward trend from most of last week and rose again yesterday. The U.S pending home sales report came out yesterday and showed a moderate gain in the index: the forward looking index rose by 1.5% to 105.7 in March. Will gold and silver continue to rally? Currently, the price of silver is slightly rising. On today’s agenda: German Consumer Climate, Flash Spain’s GDP Q1 2013, Canada’s GDP by Industry, U.S Consumer Confidence and China Manufacturing PMI.
Here is a short outlook for precious metals for Tuesday, April 30th:
Precious Metals – April Update
On Monday, the price of gold rose by 0.95% to $1,467.4; Silver also increased by 1.53% to $24.12. During the month, gold fell by 7.99%; silver, by 14.74%.
In the chart below are the normalized prices of gold and silver for the past month (normalized to 100 as of March 28th). The prices of gold and silver have recovered in the past several days.
The gold and silver futures volumes of trade have declined on Monday to 144 thousand and 75 thousand, respectively. These numbers are lower than the volume traded last week. If the volume will remain low today, this could lower the odds of a sudden sharp movement in the prices of gold and silver. The chart below presents the volume of trading gold and silver futures in the CME during April.
China Manufacturing PMI: Based on the recent report for March the Manufacturing PMI inched up to 50.9; this means that China’s manufacturing sectors is expanding at a faster rate. The flash report showed that the PMI slipped in April but remained above the 50 point mark. If in the upcoming report the PMI will decline below the 50 point mark, it could signal slowdown in China’s economy. If the index will dwindle, this may also adversely affect precious metals prices;
German Consumer Climate: Gfk group will publish its German consumer climate index. If this report will further show growth, it might pull up the Euro;
Flash Spain’s GDP Q1 2013: This report will show the first estimate of the quarterly growth rate of the Spain’s economy in the first quarter of 2013; during the fourth quarter Spain’s economy contracted by 0.7% (Q-2-Q);
Canada‘s GDP by Industry: In the previous update regarding January, the real gross domestic product rose by 0.2%. This report may affect the Canadian dollar, which is strongly correlated with major bullion prices;
U.S Consumer Confidence: according to the recent monthly report, the consumer confidence index fell again in February to 59.7 (M-o-M). The current expectations are that the March index may continue to fall;
Currencies / Bullion Market – April Update
The Euro/ USD also rose on Monday by 0.53% to 1.3099. During April, the Euro/USD rose by 2.21%. Moreover, other currencies such as the Aussie dollar and Canadian dollar also slightly appreciated during yesterday against the U.S dollar by 0.73% and 0.54%, respectively. The appreciation of these currencies against the U.S dollar may have partly contributed to the recovery of gold and silver during Monday. The correlations among gold, Canadian dollar and Aussie dollar remained strong: during April the linear correlation between gold and USD/CAD was -0.69 (daily percent changes); the linear correlation between the gold and AUD/USD was 0.64 (daily percent changes). These correlations suggest the recent rise of bullion rates was partly related to the shifts in the foreign exchange markets.
Current Gold and Silver Rates as of April 30th
Gold (short term delivery) is traded at $1,465. 7 per t oz. a $8.61 or 0.58% decrease as of 06:31*.
Silver (short term delivery) is at $24.22 per t oz – a 0.22% increase as of 06:31*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
07:00 – German Consumer Climate
08:00 – Flash Spain’s GDP Q1 2013
13:30 – Canada’s GDP by Industry
15:00 – U.S Consumer Confidence
02:00 – China Manufacturing PMI
09:30 – GB Manufacturing PMI
13:15 – ADP estimate of U.S. non-farm payroll
15:00 – U.S. Manufacturing PMI
15:30 – U.S Crude Oil Stockpiles Weekly Update
19:00 – FOMC Meeting
23:05 – BOC Gov Carney Speaks
00:50 – Japan’s monetary base
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