The prices of gold and silver resumed their upward trend and rose again during yesterday’s trading. The gold market was very quiet on Monday as the volume of trade in the CME was the lowest since Christmas Day of 2012. The modest volume could start to pick up today once the U.S employment report will come out. If the report surprises the markets, this could also stir up the precious metals market. Will gold and silver resume their upward trend from last week? On today’s agenda: U.S. Non-Farm Payroll Report, Canada Retails Sales and Australia’s CPI.
Here is a short overview for bullion for Tuesday, October 22nd:
Gold and Silver – October Review
On Monday, gold slightly rose by 0.10% to $1,315.6; Silver also rose by 1.66% to $22.25. During October, gold decreased by 0.84%; silver rose by 2.60%. In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of September 30th). The prices of gold and silver have rose in the past week.
The gold and silver futures volumes of trade have declined and reached on Monday 79 thousand and 34 thousand, respectively. For gold this trade volume is the lowest level since the end of December 2012. If the volume changes direction and pick up in the coming days, this could suggest the odds of sudden sharp shift in the rates of gold and silver as a result of high volume will rise.
U.S. Non-Farm Payroll Report: In the last employment report for August 2013, the labor market slightly expanded: The number of non-farm payroll employment increased by 169k – lower than the number many had expected; the U.S unemployment rate edged down to 7.4%; if the employment increase again by over 150 thousand (in additional jobs), this may pull back down gold and silver;
Canada Retails Sales: This report will refer to the retails sales in Canada as of August. In the previous report regarding July 2013, retails sales increased by 1%;
Australia‘s CPI for Q3 2013: This quarterly report will pertain to the developments in the consumer price index. In the recent report regarding the second quarter of 2013, the CPI remained stable at 0.4% compared to the first quarter and reached a growth rate of 2.4% compared to Q2 2012; this report could affect the Aussie dollar, which is correlated with precious metals;
Currencies / Precious Metals Correlations – October Update
On Monday, the Euro/ USD currency pair slightly fell by 0.04% to 1.3681. During October, the Euro/USD rose by 1.43%. Moreover, other currencies such as the Aussie dollar and Canadian dollar slightly depreciated yesterday against the U.S dollar by 0.25% and 0.17%, respectively. The correlations among gold, silver and Euro remained robust in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.53 during October. The chart below presents these correlations.
13:30 – Canada Retails Sales
13:30 – U.S. Non-Farm Payroll Report
00:30 – Australia’s CPI for Q3 2013
09:30 –MPC Asset Purchase and Rate Votes
15:00 – Bank of Canada’s Overnight Rate
15:30 – Bank of Canada’s Monetary Policy and Press Conference
02:45 – China Manufacturing PMI
For further reading:
- Gold and Silver Outlook for October 2013
- Gold and Silver Weekly Forecast for October 21-25
- Weekly Outlook of Financial Markets for October 21-25
- Gold and Silver Yearly Outlook For 2013