Gold and silver prices continued their upward trend of the past couple of weeks. Yesterday the ECB decided to keep interest rates unchanged which in turn may have helped keep the Euro strong against the US dollar. . But in today’s news the concern of France’s credit rating downgrade by S&P may be among the key factors in pulling down the Euro and the commodities markets along with it. Currently, gold and silver are traded down. Today, Great Britain’s PPI Input report will be published, America’s trade balance report and Canada’s trade balance report.
Here is a market outlook of precious metals prices for today, January 13th:
Gold and Silver Prices –January Update
Gold price moderately rose on Thursday by 0.49% to $1,647.7; silver price also rose by 0.78% to reach $30.12. During January, gold price rose by 5.2% and silver price by 7.9%.
In the chart below are the normalized gold and silver prices (gold and silver prices are normalized to December 30th). The chart shows the upward trend of these precious metals during recent weeks.
The ratio between gold and silver prices slightly slipped on Thursday, January 12th and reached 54.70. During January the ratio decreased by 2.5% as silver price has slightly outperformed gold price.
Despite the sharp changes in gold and silver prices during January, their linear correlation is still strong as indicated in the chart below.
ECB Kept Interest Rate at 1.00%
As expected the European Central Bank kept the basic interest rate at 1.00% after ECB had cut the rate in twice in the last two rate decisions. President of ECB, Mario Draghi continues to call for structural reforms in EU countries.
This news may have been among the factors to trade up the Euro against the U.S. dollar and consequently keep major commodities prices rising.
U.S Retail Sales Slightly Rose in December
In December, the U.S. retail and food sales reached $400.6 billion, which is 0.1% above the sales in November and 6.5% above December 2010. This news shows that the U.S. economy continues to expand.
U.S. Initial Claims Rose Last Week
According to the recent weekly update on the U.S. initial jobless claims rose by 24,000 for the week ending on January 7th to 399,000 claims (seasonally adjusted data); the number of insured unemployment reached 3.628 million, an increase of 19,000 compared with the previous week’s figure. This news may have affected the currency forex trading during yesterday’s trading and pressured down the US dollar against other currencies.
On Today’s Agenda
American Trade Balance: This report will present the changes in imports and exports of goods and services to and from the U.S; during October, the American trade balance report showed that the goods deficit decreased by $0.7 billion compared with September 2011 and reached $58.8 billion; the service surplus remained virtually unchanged at $15.8 billion; as a result, the goods and services deficit declined during the month to $43.5 billion.
Great Britain PPI Input: this report will present the yearly rate of GB’s producer price index for December 2011; in the last report regarding November the input price rose by 0.1% (M-2-M); this news may influence British Pound traders;
Canadian Trade Balance: In the December report regarding October 2011, imports rose while exports decreased during the month: exports decreased by 3.0%, and imports rose by 1.9%; as a result, the trade surplus fell from $1 billion in September to a deficit of $885 million in October.
Forex Exchange Rate Trading / Gold & Silver Prices – January
The Euro to U.S Dollar changed direction again and rose on Thursday by 0.86% to reach 1.2815; the recent ECB rate decision may have helped keep the Euro from falling against the U.S. dollar in yesterday’s trading. Furthermore, during yesterday the Australian dollar also appreciated against the U.S dollar. If this trend will continue it might also affect gold and silver prices to rise. Currently, the Euro/USD is traded slightly up.
Current Gold and Silver Prices January 13th
The major precious metals prices are currently moderately falling in the European markets:
Current gold price per ounce short term future (February 2012 delivery) is traded at $1,644.20 per t oz. a $3.5 or 0.21% decrease as of 09:00*.
Current silver price per ounce short term future (February 2012 delivery) is at $30.005 per t oz – a $0.119 or 0.40% decrease as of 09:01*.
(* GMT)
Gold and Silver Prices Outlook
Gold and silver prices continued their upward and this trend might continue if the Euro and AUD will keep on rising against the U.S. dollar, and the U.S. Long Term securities yields will remain low. The upcoming U.S. report – the trade balance may also affect the forex trading and consequently gold and silver prices.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Today
09:30 – Great Britain PPI Input
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
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