Gold and silver changes direction again and bounced back yesterday after they have declined a day earlier. According to the recent U.S jobless claims update, initial claims declined last week 23k to 393k. Further, the recent U.S GDP estimate for the third quarter was high than the preliminary estimate: GDP grew by 2.7%. On the other hand, not all is well in the U.S. The recent talks of policymakers regarding the budget talks didn’t lead to a decision; thus the fiscal cliff is still a concern that could affect the USD and commodities markets. Currently, gold prices are increasing. On today’s agenda: KOF Economic Barometer, German Retail Sales, Euro Area unemployment rate, Canada’s GDP, U.S Personal Spending and China Manufacturing PMI.
Here is a short outlook for precious metals for Friday, November 30th:
Precious Metals –November Update
On Thursday, gold price bounced back by 0.62% to $1,727.2; Silver price also increased by 1.97% to $34.35. During the month, gold edged up by 0.47%; silver rose by 6.29%.
The chart below shows the developments in the normalized prices of precious metals during the month (normalized to 100 as of October 31st). In recent days both precious metals zigzagged with an unclear trend.
The ratio between the two precious metals declined again on Thursday to 50.29. During the month the ratio declined by 5.47% as gold under-performed silver.
On Today’s Agenda
KOF Economic Barometer: According to the previous report, the report predicted that the Swiss Economy is headed towards an expansion for the year;
German Retail Sales: In October, retail sales rose by 1.5% – higher than many had anticipated; if this report will increase again then it might strengthen the Euro;
Euro Area unemployment rate: in September, the unemployment rate rose again to 11.6%. If in the forthcoming report this the rate will rise again, it may adversely affect the Euro;
Euro Area Flash Estimate of Annual Inflation: the inflation in Euro Area declined to 2.5% during October. If the upcoming inflation rate estimate will fall, it may raise the chances of ECB cutting its interest rate next week;
Canada’s GDP by Industry: In the recent report regarding August 2012, the real gross domestic product edged up by 0.1%. This report may affect the strength of the Canadian dollar currency which is strongly correlated with major commodities such as silver and gold;
U.S Personal spending: in the last report regarding September the personal income rose by 0.8%; disposable personal income also rose by 0.4%;
China Manufacturing PMI: According the recent report regarding October the Manufacturing PMI rose to 50.2; this means that China’s manufacturing sectors expanded at a slow pace; the recent flash manufacturing PMI increased to a 13 month high. If this upcoming report will also present an additional growth, it could signal a rise in China’s economy.
Currencies / Bullion Market – November Update
On Thursday, the Euro/ USD edged up again by 0.2% to 1.2979. During the month, the Euro/USD edged up by 0.15%. Conversely, some currencies such as Aussie dollar slightly depreciated yesterday against the USD by 0.06%. This little movement and mixed trend in the foreign exchange markets suggest the recent rally in the bullion markets was less affected by the developments in the currencies markets. The correlations among gold, Euro and Aussie declined in recent days even though they are still robust: during the month, the linear correlation between gold and Euro /USD was 0.47 (daily percent changes); the linear correlation between the gold and AUD/ USD was 0.39 (daily percent changes). Thus, if the Euro and other risk currencies will fall against the USD, they are likely to pull down gold and silver.
Current Gold and Silver Rates as of November 30th
Gold (short term delivery) is traded at $1,732.4 per t oz. a $2.8 or 0.16% increase as of 11:45*.
Silver (short term delivery) is at $34.2 per t oz – a $0.15 or 0.43% decrease as of 23:33*.
Daily Outlook for November 30th
The recent unclear trend in the prices of gold and silver might extend to the last day of the week. The high speculations around the U.S budget talks are likely to keep dragging the prices of precious metals in different directions. Following yesterday’s rally in commodities and stocks there might be a moderate correction on the last day of the week. The recent positive reports regarding the U.S economy could have some lingering adverse effect on bullion rates. The upcoming reports regarding Canada and EU economy could affect each respective currency, which, in turn could influence bullion traders. Finally, if the Euro and other “risk currencies” will decline again against the USD, then they are likely to adversely affect precious metals.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
08:00 – KOF Economic Barometer
08:00 – German Retail Sales
10:00 – Euro Area unemployment rate
13:30 – Canada’s GDP by Industry
13:30 – U.S Personal Spending
02:00 – China Manufacturing PMI
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