Gold and Silver Prices – Daily Outlook for January 10

The prices of gold and silver changed direction and edged down on Wednesday. Moreover, many other commodities and currencies pairs have also declined yesterday. In the recent U.S bond auction the U.S average interest rate for the 10 year bond inched down to 1.625 (in the previous bond auction it was 1.65). China’s trade balance report was published today, it showed China’s exports rose in December. This news might positively influence commodities traders. Will precious metals change direction again and rally? Currently, gold and silver are traded up. On today’s agenda: Great Britain Bank Rate & Asset Purchase Plan, ECB Euro Rate Decision, U.S Jobless Claims, and Japan Current Account.

Here is a short outlook for precious metals for Thursday, January 10th:

Precious Metals – January Update

On Wednesday, the price of gold declined by 0.4% to $1,655.5; Silver price also slipped by 0.7% to $30.22. During the month, gold declined by 1.15%; silver edged up by 0.17%.

As seen below, the chart presents the shifts in the normalized prices of precious metals during January (normalized to 100 as of December 31st). During recent days, the prices of silver and gold have moved with an unclear trend.

Gold & silver outlook 2013  January 10

The ratio between the two precious metals edged up on Wednesday to 54.78. During the month, the ratio slipped by 1.32% as gold has under-performed silver.

Ratio Gold & silver prices 2013  January 10

The gold and silver futures volumes of trade have fallen in recent days following the big market awakening after the holiday season. On Wednesday the volume reached 157 thousand and 40 thousand, for gold and silver, respectively. These numbers are lower than the volume traded in the past several days. Due to the forthcoming rate decisions in Europe, the volume might pick up today.  If the volume will rise, this could suggest the odds of sudden sharp shifts in the prices of gold and silver due to high volume will decrease. The chart below shows the volume of trading gold and silver futures in the CME in recent weeks.

Volume Gold & silver 2013  January 10

On Today’s Agenda

MPC Rate Decision and Asset Purchase Plan: The MPC will announce the Bank’s interest rate for January and of any changes to BOE’s asset purchase plan; as of December BOE left rate unchanged at 0.5% and the asset purchase plan was left at £375 billion;

ECB Euro Rate Decision: Back in July 2012 the ECB decided to reduce its cash rate by 0.25pp to 0.75%. Since then, however, the speculations around another rate reduction were high. The ECB has ample reasons to reduce its basic rate: the EU economy isn’t improving, the inflation is stable, the Fed’s stimulus plan pressures up the Euro and many EU banks continue to struggle. Thus, the ECB might decide to cut the rate by another 0.25pp in the near future. Despite these factors, many estimate the ECB will keep the rate unchanged again;

U.S. Jobless Claims Weekly Report: in the previous report the jobless claims rose by 10k to reach 372k; this upcoming weekly report may affect the U.S dollar and consequently precious metals;

Japan Current Account: this report will show the changes in the difference between exports and imports for Japan during last month; this news may affect the strength of the Yen;

Currencies / Bullion Market – January Update

The Euro/ USD edged down on Wednesday by 0.15% to 1.3064. During the month, the Euro/USD fell by 0.98%. Alternately, some currencies such as Aussie dollar appreciated on Wednesday against the USD by 0.05%. The Japanese yen sharply depreciated against the USD by 1%. Some claim the drop in the yen was due to inflation prospects. The movement of these currencies didn’t seem to affect precious metals. The correlations among gold, Euro and Aussie remained weak in recent weeks: during December and January, the linear correlation between gold and Euro /USD is at -0.17 (daily percent changes); the linear correlation between the gold and USD/CAD was -0.24 (daily percent changes). These weak correlations might suggest the recent shifts in gold and silver didn’t coincide or resulted from the changes in the foreign exchange markets. Nonetheless, if the Euro and other risk currencies will rally against the USD, they might positively affect precious metals.

Current Gold and Silver Rates as of January 10th

Gold (short term delivery) is traded at $1,659 per t oz. a $3.7or 0.22% increase as of 07:09*.

Silver (short term delivery) is at $30.4 per t oz – a $0.16or 0.52% increase as of 07:09*.

(* GMT)

Daily Outlook for January 10th

Prices of precious metals changed direction again and edged down on Wednesday. This modest movement might continue today, even though the prices might change direction again and edge up. The speculations around today’s rate decisions including ECB and MPC might affect not only their respective currencies but also bullion rates. If these Bank committees will leave the rates unchanged, this could help rally the Euro and British Pound and thus might also positively affect precious metals.   The uncertainty around the future steps U.S policymakers will take in raising debt ceiling or the future spending cuts might affect gold and silver in the weeks to follow. The upcoming reports that will be published today including: U.S. Jobless Claims and Japan Current Account could affect not only the USD and Japanese yen but also precious metals. If the Jobless Claims report will show the U.S economy is progressing, this could adversely affect precious metals via the USD. Finally, if the Euro and other “risk currencies” will appreciate against the USD, they might positively affect gold and silver.

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


12:00 – Great Britain Bank Rate & Asset Purchase Plan

12:45 – ECB Euro Rate Decision

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

00:50 – Japan Current Account


12:00 – Great Britain Bank Rate & Asset Purchase Plan

12:45 – ECB Euro Rate Decision

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

00:50 – Japan Current Account

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