Gold and silver prices continue to change direction with an unclear trend as they have shifted from gains to losses every day in the past week and a half. Yesterday it was reported that the U.S ISM Non-Manufacturing PMI remained nearly unchanged and the Australian GDP expanded by a higher than expected rate. This news could help rally not only the Aussie dollar but also bullion prices. Currently gold and silver are rising. On today’s agenda: ECB will announce its decision on the Euro Rate (update: ECB left interest rate unchanged), German Industrial Production report, FOMC Member Lockhart Speaks, Australian Rate of Unemployment.
Here is a short analysis for gold and silver for Wednesday, June 6th:
Precious Metals –June Update
Gold price bounced back and edged up on Tuesday by 0.19% to $1,616; silver also increased by 1.42% to $28.41. During the month gold traded up by 3.37% and silver by 2.33%.
The chart below shows the normalized rates of these metals during the past couple of weeks (normalized to 100 as of May 15th).
During May 2012 this index remained nearly unchanged as it expanded by 0.2 percent points from 53.5% to 53.7%. This means the non-manufacturing sector grew at a slightly faster pace in May compared to April.
Australian GDP Sharply Rose in Q1 2012
The recent slowdown in China’s growth didn’t seem to hold back the expansion of the Australian economy: during the first quarter of 2012 the economy expanded by 1.3% (Q-o-Q), which represents a 4.3% annual growth (seasonally adjusted). This is a higher rate than many had anticipated. This news is likely to pull up the Aussie dollar which is positively correlated with precious metals prices.
On Today’s Agenda
ECB Euro Rate Decision: As of last month, President of ECB, Mario Draghi kept the rate unchanged at 1%; as of April, the inflation declined to an annual rate of 2.6%, the EU unemployment edged up to 10.9% and the EU GDP in the Q1 2012 was 0%. ECB might consider remaining on the sidelines until the uncertainly around Greece and Spain will dissipate. Having said that, if the ECB will change its interest rate, it is likely to affect the Euro/USD and consequently may also affect precious metals;
German Industrial Production: this report will indicate the development ofGermany’s output and consequently may affect the Euro/USD; last month, the industrial output sharply rose by 2.8%;
FOMC Member Lockhart Speaks: FOMC member Lockhart will give a speech about the U.S economy. If he will hint of the future steps of the FOMC it might affect the financial markets;
Australia Rate of Unemployment: the number of employed rose by 15,500 people in April. If this positive trend ill continue to could further push up the Australian dollar (see here the recent report);
Currencies / Gold & Silver Market – June Update
The Euro/U.S Dollar slipped yesterday by 0.38% to 1.2453. During the month (UTD) the Euro/U.S Dollar rose by 0.7%. On the other hand, other exchange rates such as the Aussie dollar and Canadian dollar slightly appreciated during Tuesday against the USD by 0.14% and 0.11%, respectively. The recent positive GDP report of Australia could help boost the Aussie during today’s trading. If the U.S dollar will resume its descent against the Euro, it might help rally bullion rates. Currently the Euro is rising against the USD.
Current Gold and Silver Prices as of June 6th
Gold (July 2012 delivery) is traded at $1,637.6 per t oz. a $20.7 or 1.28% increase as of 16:56*.
Silver (July 2012 delivery) is at $29.68 per t oz – a $1.275 or 4.49% increase as of 16:56*.
Daily Outlook for June 6th
Bullion prices moved from gains to losses with an unclear trend in recent days and this may continue today. The recent good news of the higher than expected GDP growth rate in Australia is likely to keep the Aussie dollar rising and may also positively affect precious metals. If today’s Australian employment report will also be positive it could keep this trend. Today’s ECB rate decision could also play a role in affecting forex and commodities markets providing there will be a big announcement from ECB President.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
11:00 – German Industrial Production
12:45 –Euro Rate Decision
13:15 – FOMC Member Lockhart Speaks
15:30 – U.S Crude Oil Stockpiles Report
2:30 –AustraliaRate of Unemployment
08:00 – Swiss National Bank Forex Reserves
Tentative – French 10 Year Bond Auction
13:30 – U.S Jobless Claims Weekly Report
12:00 –Great BritainBank Rate & Asset Purchase Plan
15:00 – Bernanke’s Testimony
15:30 – EIAU.S.Natural Gas Storage Update
00:30 –JapanCurrent Account
2:30 – Australian Trade Balance
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