Gold and silver haven’t done much on Thursday. Their little movement coincided with the slow movement in the forex market. Bernanke’s testimony in Senate didn’t offer much additional insight as to the Fed’s future steps regarding tapering QE3. In the mean time, jobless claims sharply fell by 24k to reach 334k; in the U.S Philly Fed index rose again from 12.5 in June to 19.8 in July. The ongoing recovery of the U.S economy is likely to drag down the demand for gold and silver as investment, which will adversely affect precious metals prices. Will gold and silver resume their downward trend today? On today’s agenda: Canada’s core CPI, and G20 Summit.
Here is a short outlook for precious metals for Friday, July 19th:
Gold and Silver Prices Review – July Update
On Thursday, gold rallied by 0.52% to $1,284.2; Silver decreased by 0.16% to $19.38. During July, gold rose by 4.94%; silver slipped by 0.37%.
In the chart below are the normalized rates of gold and silver for 2013 (normalized to 100 as of June 28th). The prices of gold and silver have rallied during the month.
The gold and silver futures volumes of trade have fallen on Thursday to 148 thousand and 44 thousand, respectively. These numbers are lower than the volume traded during most of the week. If the volume will further dwindle today, this could pull down the volatility of precious metals prices. The chart below shows the volume of trading gold and silver futures in the CME during the month.
See here the weekly outlook of gold and silver for July 15-19.
On Today’s Agenda
Canada‘s core CPI: This report will refer to the CPI and core consumer price index (controlling the volatile components such as energy, fruit and vegetables) for June 2013. Based on the recent Canadian CPI report for May, the core CPI edged up by 0.2%. This report might affect the direction of the Canadian dollar, which is also strongly correlated with precious metals;
G20 Summit: this is a two day Summit; if the G20 countries will come up with big headlines from this Summit it may affect financial markets. This G20 Meeting could revolve the policies of U.S, Canada, China, UK and Japan.
Currencies / Bullion Market – July Update
The Euro/ USD currency pair slipped on Thursday by 0.12% to 1.3109. During July, the Euro/USD increased by 0.76%. Moreover, other currencies such as the Aussie dollar also depreciated yesterday against the U.S dollar by 0.73%. The correlations among gold, Euro and Canadian dollar strengthened in recent weeks, e.g. the correlation between the Euro/USD and silver price is 0.61. If these correlations will further strengthen, the currencies pairs CAD/USD, Euro/USD and USD /Japanese yen are likely to affect bullion prices.
Current Gold and Silver Rates as of July 19th
Gold (short term delivery) is traded at $1,287.60 per t oz. a $2.1 or 0.16% increase as of 09:17*.
Silver (short term delivery) is at $19.31 per t oz – a 0.41% decrease as of 09:17*.
Here is a reminder of the top events and publications that are scheduled for today (all times GMT):
13:00 – Canada’s core CPI
All Day (two days) – G20 Summit
For further reading: