Gold and silver started off the week with little movement as both metals shifted from gains to losses throughout the day (Monday) until both metals settled in the green column. There are renewed speculation around another stimulus plan by the Fed after Fed bank of Chicago President Evans said he would support measures of the Fed to generate growth in U.S jobs. It’s still unclear if the €100 billion bailout that Spain asked from the EU will be enough. Italy plans to auction €9.5 billion of debt this week. If the yields will surge it could raise the concerns around the EU debt crisis. China’s new loans exceeded expectations as the money supply growth accelerated. Currently gold and silver are rising. On today’s agenda: Great Britain Manufacturing Production, U.S. Federal Budget Balance, Bank of Australia Governor Stevens will give a speech.
Here is a short analysis for gold and silver for Tuesday, June 12th:
Precious Metals –June Update
Gold price increased on Monday by 0.34% to $1,596; silver also rose by 0.51% to $28.62. During the month gold traded up by 2.08% and silver by 3.09%.
The chart below shows the normalized rates of these metals during the month (normalized to 100 as of May 31st).
The ratio between the two metals edged down on Monday to 55.8. During the month the ratio fell by 0.98% as silver has moderately out-performed gold.
On Today’s Agenda
U.S. Federal Budget Balance: this upcoming U.S federal budget monthly update will refer to May 2012; this report indicates the government debt growth and thus may affect the USD. In April the deficit declined by $59 billion to a deficit of $719 billion for (fiscal year of 2012); if this trend will continue it could further appreciate the USD and thus might also adversely affect gold and silver rates;
Great Britain Manufacturing Production: in the last report regarding March the index rose by 0.9% (M-2-M); this news may affect the British Pound;
Bank of Australia Governor Stevens will give a speech: The Bank of Australia governor Stevens will give a speech as part of a discussion panel in the Australian Securities Investments Commission;
Currencies / Gold & Silver Market – June Update
The Euro/US Dollar slipped on Monday by 0.28% to 1.2482. During the month (UTD) the Euro/U.S Dollar increased by 0.94%. Furthermore, other exchange rates such as the Aussie dollar and Canadian dollar also depreciated during Monday against the USD by 0.53% and 0.51%, respectively. If the U.S dollar will depreciate against these currencies, it may pull up bullion rates. Currently the Euro is slipping down against the USD.
Current Gold and Silver Rates as of June 12th
Gold (July 2012 delivery) is traded at $1,611.8 per t oz. a $15 or 0.94% increase as of 16:22*.
Silver (July 2012 delivery) is at $28.895 per t oz – a $0.279 or 0.97% increase as of 16:23*.
(* GMT)
Daily Outlook for June 12th
Bullion prices started off the week rising despite the decline in other commodities prices and the depreciation of Euro and Aussie dollar. This low volatility may continue today. The upcoming U.S federal budget update could affect not only the USD but also precious metals rates. If the deficit will further rise it could positively affect the USD. The speculation around the developments in Europe vis-à-vis the debt crisis, mainly Spain, is likely to keep the speculation high and thus affecting the markets’ movements.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
Tentative –IEA monthly oil report
Tentative –OPEC Monthly Report
09:30 –Great BritainManufacturing Production
19:00 –U.S.Federal Budget Balance
2:10 –Bank ofAustraliaGovernor Stevens speaks
Tomorrow
Tentative – German 10 Year Bond Auction
13:30 –U.S.Retail Sales Report
13:30 –U.S.Producer Price Index
15:30 – U.S Crude Oil Stockpiles Report
18:00 – U.S 10 Year Bond Auction
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