The prices of silver and gold slightly declined yesterday. Their modest drop didn’t coincide with the moderate appreciation of “risk currencies” such as Canadian dollar and Aussie dollar against the USD. Yesterday, the U.S retail sales report came out. The report showed a moderate gain in the retail sales inched up by 0.1%. Bank of Japan published its monetary policy statement: the Bank left its policy unchanged. Will gold and silver continue to trade down? Currently, gold and silver are declining. On today’s agenda: EU GDP for Q4 2012, U.S. Jobless Claims, and ECB Monthly Bulletin.
Here is a short outlook for precious metals for Thursday, February 14th:
Precious Metals – February Update
On Wednesday, the price of gold declined by 0.27% to $1,644.5; Silver also decreased by 0.48% to $30.87. During the month, gold decreased by 0.97%; silver, by 1.49%.
The modest drop in precious metals rates didn’t coincide with the developments in the forex market: the Canadian dollar, Japanese yen and Aussie dollar appreciated against the USD by 0.05%, 0.1% and 0.64%, respectively. The linear correlation between and several leading currencies pairs such as USD/CAD and AUD/USD are still mid-strong at -0.25 and 0.41, respectively. They suggest that if these currencies will change course and fall against the USD, they may pressure down bullion rates.
In the chart below are the normalized rates of gold and silver during February (normalized to 100 as of January 31st). The prices have had a downward trend during the month.
The ratio between the two precious metals rose on Wednesday to 53.27. During the month, the ratio edged up by 0.53% as gold slightly out-performed silver.
On Today’s Agenda
EU GDP for Q4 2012: According to the latest update, the French GDP contracted by 0.3% in the fourth quarter of 2012. Furthermore, the German economy contracted by 0.6% in Q4 2012. The expectations were on a 0.5% drop. These figures are likely to pull down the Euro currency. Thus, this could also lead to a decline in the prices of commodities including gold and silver.
ECB Monthly Bulletin: This monthly update for January examines the economic developments of the Euro Area including price stability, interest rate decisions and governments’ debt; this report might provide some insight behind the updated expectations of the EU growth;
U.S. Jobless Claims: in the previous report the jobless claims fell by 5k to reach 366k; this upcoming weekly report may affect the U.S dollar and consequently precious metals;
Current Gold and Silver Rates as of February 14th
Gold (short term delivery) is traded at $1,643.8 per t oz. a $1.5 or 0.09% decrease as of 07:24*.
Silver (short term delivery) is at $30.8 per t oz – a $0.07 or 0.24% decrease as of 07:24*.
(* GMT)
Daily Outlook for February 14th
Prices of gold and silver slightly declined yesterday. Their modest fall may have been part of the moderate upward trend in recent weeks. The recent publication of the Euro Area GDP for the fourth quarter is likely to pull down not only the Euro but also precious metals prices. The upcoming U.S jobless claims weekly update is likely to affect the path of the USD. If the number of jobless claims will continue to fall as it did in recent weeks, this could strengthen the USD and thus may also contribute to the downward trend of precious metals. Finally, if the Euro and other “risk currencies” will continue to depreciate during the day against the USD, they might adversely affect precious metals.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
9:00 – ECB Monthly Bulletin
10:00 – EU GDP for Q4 2012
13:30 – U.S. Jobless Claims Weekly Report
Tomorrow
09:30 – GB Retails Sales
14:00 – U.S. TIC Long Term Purchases
14:55 – UoM Consumer Sentiment
All Day – G20 Meeting
For further reading:
- Gold and Silver Outlook for February 11-15
- Weekly Outlook Financial Markets for February 11-15
- Gold and Silver Outlook for February
- Gold and Silver Yearly Outlook For 2013