Gold and Silver Prices Weekly Outlook for July 23-27

Last week gold and silver prices resumed their downward trend and edged down during most of last week. Bernanke didn’t hint of stimulus plan in his testimonies at the Hill; he also didn’t offer any information about the future steps of the FOMC. According to the recent reports that came out last week the U.S housing starts rose during June, while existing home sales declined by 5.4%; Philly Fed index remained negative but slightly rose, while retail sales edged down. All these reports paint a mixed signal as to the economic progress of the U.S. If the upcoming U.S reports will paint a clearer picture of the developments in the U.S, then they may have a more substantial effect on the bullion market. 

  Here is a short outlook for July 23rd to July 27th; this includes a fundamental analysis of the main publications, and speeches that may affect bullion rates.

Gold price slipped during last week by 0.58%; further, during said time the average rate reached $1,583.02 /t. oz which is 0.17% above the previous week’s average rate of $1,580.38 /t. oz.

Silver also edged down on a weekly scale by 0.24%; on the other hand, the average rate reached $27.25/t oz which is 0.27% above the previous week’s average $27.18/t oz. Furthermore, during last week the SPDR Gold Shares (GLD) also edged down by 0.3% and settled by July 20th at 153.67.

The Euro declined against the U.S dollar by 0.74% (on a weekly scale); alternatively, other “risk” currencies such as the Australian dollar and Canadian dollar appreciated against the U.S dollar by 1.49% and 0.13%, respectively. The mixed trend in which the Euro declined while AUD and CAD rose may have contributed to the unclear trend of bullion rates . The correlation between the Euro/USD and precious metals remains robust: during the month the correlation between Euro/USD and gold reached 0.66. This means if the Euro will continue to decline it could pressure down gold and silver during the week.

In the video below there is a broad overview of the main publications, events and reports that may affect gold and silver prices between July 23rd and July 27th. Some of these reports and events include American GDP for Q2 2012 (flash report), pending and new home sales, Euro money supply, Bernanke’s speech, Governor Stevens speaks, U.S core durable goods and U.S. jobless claims (just to name a few).


In conclusion, I guess the bullion market will continue to show weakness as precious metals rates will further decline. This downward trend might have a moderate curve especially if the upcoming U.S reports won’t present any substantial changes. The upcoming reports from China, Canada, Euro Area and U.S such as manufacturing PMI, retails sales, and housing market reports might affect the commodities and forex markets. If these reports will show little growth in these economies then they might adversely affect commodities rates including precious metals. The speech of Bernanke might affect the markets if he will hint of the possibility of QE3 in the near future. But I guess this won’t be the case as it was last week when he testified at the hill. Finally, if the Euro, Aussie dollar and other rates will decline against the USD, this trend could also pressure down precious metals.

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