Gold and silver prices changed direction and slipped yesterday. In the forex market the big movement came from Asia as the Japanese yen sharply strengthened following Bank of Japan’s recent monetary policy meeting. The Bank decided to keep its policy unchanged, which wasn’t what many traders had anticipated. In U.S equities, leading indexes declined along with other leading commodities prices. This downward trend across the markets may have contributed to the fall of precious metals prices yesterday. Will gold and silver continue to trade down today? On today’s agenda: Great Britain Claimant Count Change, EU Industrial Production, U.S 10 Year Bond, and U.S. Federal Budget Balance.
Here is a short outlook for precious metals for Wednesday, June 12th:
Precious Metals – June Update
On Tuesday, gold changed direction and decreased by 0.66% to $1,377.1; Silver also fell by 1.27% to $21.65. During the month, gold declined by 1.11%; silver, by 2.62%.
In the chart below are the normalized rates of gold and silver in June (normalized to 100 as of May 31st). The prices of gold and silver have mainly declined in the past several days.
The ratio between the two precious metals slightly rose on Tuesday to 63.62. During June, the ratio increased by 1.55% as gold slightly out-performed silver.
The rise in movement of both bullion rates is represented in the increase in precious metals prices’ volatility during the month: the standard deviations of gold and silver (daily percent changes) reached 1.30% and 2.14%, respectively.
On Today’s Agenda
Great Britain Claimant Count Change: This update will show the changes in the number of unemployed in GB; as of last month’s report this figure had slipped by 7.3k; the rate of unemployment inched down to 7.8%;
EU Industrial Production: this report will present the monthly changes in the industrial production as of May; as of April, the production rose by 1.0%; this report may affect the euro/usd;
U.S 10 Year Bond Auction: the U.S government will come out with its monthly bond auction; in last auction, which was held at the second week of May, the average rate reached 1.81% – slightly higher than in the previous auction;
U.S. Federal Budget Balance: this upcoming report will refer to May 2013; this report indicates the government debt growth and thus may affect the U.S dollar. In the previous report regarding April the deficit fell by $112 billion; if the deficit will continue to contract, it could indicate the economic progress of the U.S economy is slowing down;
Currencies / Bullion Market – June Update
The Euro/ USD slightly increased again on Tuesday by 0.42% to 1.3313. During June, the Euro/USD increased by 2.42%. Moreover, other currencies such as the Canadian dollar and Japanese yen also appreciated yesterday against the U.S dollar by 0.05% and 2.76%, respectively. The correlations among gold, silver, Euro and Canadian dollar strengthened as seen in the chart below. If these correlations will continue to hold up, the developments in the forex markets could also affect bullion rates.
Current Gold and Silver Rates as of June 12th
Gold (short term delivery) is traded at $1,373.60 per t oz. a $3.4 or 0.25% decrease as of 06:30*.
Silver (short term delivery) is at $21.61 per t oz – a 0.17% decrease as of 06:30*.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – Great Britain Claimant Count Change
10:00 –EU Industrial Production
Tentative – U.S 10 Year Bond Auction
19:00 –U.S. Federal Budget Balance
02:30 – Australia Employment Report
09:00 – ECB Monthly Bulletin
Tentative – Italian 10 Year Bond Auction
13:30 – U.S. Jobless Claims Weekly Report
13:30 –U.S. Retail Sales Report
00:50 – Japan’s monetary policy meeting
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