Gold and Silver – Daily Outlook for December 13th

The gold and silver market continue to change direction with unclear trend: Yesterday both precious metals changed course and plummeted to their lowest level this week. The sharp rise earlier this week was erased. This unclear trend is likely to persist until the next FOMC meeting will conclude later next week. Currently more analysts speculate a decision to taper QE3 in the upcoming December meeting is viable.    In the meantime, investors are likely to continue seeking hints from the changes in the U.S economy and how it may influence the FOMC members. Yesterday, the U.S retail sales report showed a moderate rise in sales of 0.7% in November, month over month, and 4.7% from November 2012; jobless claims changed direction and spiked by 68k to 368k. This news may depreciate the US dollar. On today’s agenda: U.S PPI.

Here is a short overview for precious metals for Friday, December 13th:

Gold and Silver – December Review                          

On Thursday, gold tumbled down by 2.56% to $1,225.7; Silver, by 4.43% to $19.41 – their lowest this week. During December, gold fell by 1.98%; silver, by 2.93%. In the chart below are the normalized prices of bullion for 2013 (normalized to 100 as of November 29th). The prices of gold and silver have resumed their downward trend from recent weeks.

Gold and silver Chart 2013 December 13The ratio between the two precious metals rose on Thursday to 63.14. During December, the ratio slightly rose by 0.98% as silver has moderately under-performed gold.

Gold to silver ratio Chart 2013 December 13The gold and silver futures volumes of trade have moved much and reached on Thursday 162 thousand and 50 thousand, respectively. The volume of trade is likely to remain low today.

On Today’s Agenda

U.S. Producer Price Index: This report presents the inflation rate from the producers’ side; it will refer to November 2013. In the last report regarding October, this index for finished goods slightly fell by 0.2% compared with September’s level; the core PPI inched up by 0.2%; this news might affect the USD;

Currencies / Precious Metals Correlations – December Update

On Thursday, the Eur/USD currency pair slipped by 0.06% to 1.3753. During December, the Eur/USD increased by 1.19%. Conversely, other currencies such as the Aussie dollar sharply depreciated yesterday against the U.S dollar by 2.34%. The correlations among gold, silver and Euro have weakened in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.23 during November/December.  

 

Here is a reminder of the main events and publications that are scheduled for today (all times GMT):

Today

Tomorrow

13:30 – U.S. Producer Price Index

For further reading: