Precious metals prices, much like many other commodities, continue to zigzag with an unclear trend. This could be, among others, due to the London Olympics that shifted the attention of many traders to this prime even. The price of gold edged up on Wednesday while silver slipped. The Euro an many other risk currencies continued to depreciate against the USD. Currently, gold and silver prices are falling. On today’s agenda: ECB Monthly Bulletin, American and Canadian Trade Balance reports, and U.S. Jobless Claims.
Here is a short outlook for precious metals for Thursday, August 9th:
Precious Metals –August Update
Gold rose on Wednesday by 0.2% to $1,616; Silver, on the other hand edged down by 0.04% to $28.08. During the month, gold edged up by 0.09%; silver, by 0.58%.
As seen, the chart presents the changes of normalized rates of precious metals in the last few weeks (normalized to 100 as of July 16th). As seen, during recent weeks gold and silver didn’t move from their respective range.
The ratio between the two precious metals rose on Wednesday to 57.56. During August the ratio edged down by 0.49% as gold slightly under-performed silver.
ECB Monthly Bulletin: This monthly report for July 2012 examines the economic developments of the Euro Area including price stability, interest rate decisions and government’s debt; this report might provide some insight into the updated expectations of the Euro Area growth;
American Trade Balance: according to the previous American trade balance report regarding May the goods and services deficit declined during the month to $48.7 billion.
Canadian Trade Balance: In the previous report for May, exports remained nearly unchanged while imports rose by 0.4%; as a result, the trade balance declined from a $623 million deficit in April to $623 million deficit in May; this report may affect the Canadian dollar;
U.S. Jobless Claims: in the latest update the jobless claims rose by 8k to 365,000; this upcoming weekly report may affect the U.S dollar and consequently commodities prices;
Currencies / Bullion Market –August Update
The Euro/ USD declined on Wednesday by 0.27% to 1.2365. During August (UTD) the Euro/USD rose by 0.5%. Alternately, other currencies including Aussie dollar and CAD appreciated on Wednesday against the USD by 0.16% and 0.26%, respectively. The linear correlation between gold and Euro is still strong: during the past month, the correlation between the gold and EURO/USD was 0.609 (daily percent changes). Therefore, if the Euro will continue to trade down, it could also pressure down precious metals. Currently, the Euro/USD is falling.
Current Gold and Silver Rates as of August 9th
Gold (September 2012 delivery) is traded at $1,615 per t oz. a $0.7 or 0.04% decrease as of 23:04*.
Silver (September 2012 delivery) is at $27.98 per t oz – a $0.095 or 0.34% decrease as of 23:04*.
Daily Outlook for August 9th
Gold and silver are still seeking direction as they haven’t shifted from their respective price range in recent months. The ongoing decline of the Euro during this week could continue to pressure down precious metals prices. Further, if other “risk currencies” will also depreciate against the USD, then precious metals rates may follow. The upcoming U.S reports including jobless claims and trade balance could signal the progress of the U.S economy and, in turn, affect not only the USD but also commodities prices. Finally, the Canadian trade balance report could affect the Canadian dollar that tends to be correlated with bullion rates.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
9:00 – ECB Monthly Bulletin
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
13:30 – U.S. Jobless Claims Weekly Report
09:30 – Great Britain PPI Input
13:30 – Canada’s Employment Report
19:00 –U.S. Federal Budget Balance
Tentative –China’s Trade Balance
Tentative – China New Loans
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