Gold and silver rose for the second consecutive day. Today there are a couple of bond auctions that will take place including Germany and U.S. Italy will also sell bonds later this week (will seek at least €9.5 billion). If the yields will spike it could raise the concerns around the EU debt crisis. Fitch warns it will downgrade the EU countries if Greece will exit the Union. ECB stated in a report, it will endorse a plan to secure deposits, strengthen supervision on lenders in order to limit the risk for taxpayers. Currently gold and silver are declining. On today’s agenda: U.S. Retail Sales Report and U.S. Producer Price Index.
Here is a short analysis for gold and silver for Wednesday, June 13th:
Precious Metals –June Update
Gold price rose on Tuesday by 1.06% to $1,613; silver also increased by 1.16% to $28.95. During the month gold traded up by 3.17% and silver by 4.29%.
The chart below presents the normalized rates of these metals during the month (normalized to 100 as of May 31st).
According to the recent U.S federal budget monthly update during May 2012 deficit increased by $124 billion to a deficit of $844 billion for the past eight months (fiscal year of 2012); this means the government debt has risen; on the other hand the current deficit is lower than the deficit recorded during the parallel time in 2011. Back then the deficit reached $928 billion. This increase in deficit might have affected U.S dollar and consequently gold and silver rates during yesterday’s trading.
On Today’s Agenda
German 10 Year Bond Auction: the German government will issue another bond auction; it will seek to sell €5 billion of 10-year bonds and €1 billion of inflation-linked 5 year bonds; in the previous bond auction the rate of the 10 year bonds reached 1.47%;
U.S. Retail Sales Report: in the recent report regarding April, the retail sales edged up by 0.1% from the previous month; gasoline stations sales decreased by 0.3% in April compared to March;
U.S. Producer Price Index: In the previous report regarding April this index for finished goods declined by 0.2% compared with March’s rate and rose by 1.9% in the past 12 months; this news might affect gold and silver prices;
U.S 10 Year Bond Auction: the U.S government will issue another bond auction; in the previous bond auction, which was held at the second week of May, the rate reached 1.86%;
Currencies / Gold & Silver Market – June Update
The Euro/US Dollar edged up on Tuesday by 0.18% to 1.2504. During the month (UTD) the Euro/U.S Dollar increased by 1.12%. Furthermore, other exchange rates such as the Aussie dollar and Canadian dollar also appreciated during Tuesday against the USD by 0.96% and 0.51%, respectively. If the U.S dollar will continue to depreciate against these currencies, it may pull up bullion rates. Currently the Euro is increasing against the USD.
Current Gold and Silver Rates as of June 13th
Gold (July 2012 delivery) is traded at $1,610.9 per t oz. a $2.9 or 0.18% decrease as of 07:35*.
Silver (July 2012 delivery) is at $28.85 per t oz – a $0.099 or 0.34% decrease as of 07:36*.
Daily Outlook for June 13th
Bullion prices continue to trade up but on a larger scale both metals haven’t budge from their respective range in recent weeks. Gold remained in the $1550-$1650 range and silver in the $27-$29 range. I think bullion rates won’t break from this range in the days to follow. The upcoming auctions might indicate the level of anxiety in the markets and thus may adversely affect not only the USD but also bullion rates. Today’s U.S related reports including PPI and retail sales could affect commodities and forex markets if they will show sharp changes.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
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
Tentative –IEA monthly oil report
08:30 – Libor Rate of Swiss National Bank
08:30 – SNB Press Conference
9:00 – ECB Monthly Bulletin
13:30 –U.S Core Consumer Price Index
13:30 – U.S. Department of Labor– Jobless Claims Weekly Report
15:30 – EIA U.S. Natural Gas Storage Update
19:00 –Governor King speaks
Tentative – Bank of Japan – Rate Decision
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