Gold and Silver – Daily Outlook for October 24th

The rally of gold and silver prices reached a halt as both precious metals fell yesterday after they had rallied during the first two days of the week. Bank of Canada left its policy unchanged and kept the interest rate at 1%. But the Bank’s quarterly statement seemed the bank has become more dovish, which may have contributed to the fall of the Canadian dollar against the USD. Will gold and silver bounce back from its recent fall? On today’s agenda: BOE Governor Carney Speaks, U.S. Jobless Claims, U.S New Home Sales, and Flash German, French and Euro Zone Manufacturing PMI.

Here is a short review of precious metals for Thursday, October 24th:

Gold and Silver – October Review                             

On Wednesday, gold fell by 0.64% to $1,333.8; Silver also declined by 0.76% to $22.59. During October, gold increased by 0.53%; silver, by 4.17%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of September 30th). The prices of gold and silver have mostly increased in recent weeks.

Gold and silver Chart 2013  October 24The ratio between the two precious metals rallied on Wednesday to 59.05. During October, the ratio decreased by 3.50% as silver has slightly out-performed gold.

Gold  to silver ratio Chart 2013  October 24The gold and silver futures volumes of trade have declined and reached on Wednesday 103 thousand and 28 thousand, respectively.

On Today’s Agenda

Flash German, French and Euro Zone Manufacturing PMI: In the previous monthly report regarding September 2013, the Germany’s PMI slipped to 51.3 i.e. the manufacturing conditions are growing but at a slightly slower pace. This report serves signals the changes in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently precious metals;

U.S. Jobless Claims:  In the previous report the jobless claims decreased by 15k to reach 358k; the next weekly report may affect the U.S dollar and consequently precious metals markets;

U.S. New Home Sales: This report will refer to September 2013; in the previous report (opens pdf; for August), the sales of new homes rose to an annual rate of 421,000 – a 7% rise (month-over-month); if the number of home sales continue to increase, this may suggest the housing market in the U.S is reheating; this news may affect the US dollar;

BOE Governor Carney Speaks: Governor Carney will give a speech at the 125th anniversary of the Financial Times, in London;

Currencies / Precious Metals Correlations – October Update

On Wednesday, the Euro/ USD currency pair slipped by 0.04% to 1.3776. During October, the Euro/USD rose by 2.14%. Moreover, other currencies such as the Aussie dollar and Canadian dollar sharply depreciated yesterday against the U.S dollar by 0.88% and 0.93%, respectively. The correlations among gold, silver and Euro remained strong in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.59 during September/October. The chart below shows the relations among currencies pairs and precious metals.

Correlation Gold and EURO USD 2013 October 24

Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):


09:00 – Flash German, French and Euro Zone Manufacturing PMI

13:30 – U.S. Jobless Claims Weekly Report

15:00 – U.S. New Home Sales

17:45 –BOE Governor Carney Speaks


09:00 – German Ifo Business Climate Index

09:00 – Euro Area Monetary Development

09:30 – Flash Great Britain GDP Q3 2013

13:30 – U.S Core Durable Goods

14:55 – UoM Consumer Sentiment

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