Gold and Silver – Daily Outlook for December 10th

The prices of gold and silver bounced back on Monday from last week’s decline. This may have been a correction to the plunge in prices following the positive reports on the progress of the U.S economy. This week, only a few U.S report will be released so that the prices of gold and silver are likely to follow the trend in the forex market and the progress in Asia regarding its demand for gold and silver. Will gold and silver rally this week? On today’s agenda: China New Loans, China’s Industrial Production, French Industrial Production, Great Britain Manufacturing Production, ECOFIN Summit, and Draghi’s Speech.

Here is a short overview for precious metals for Tuesday, December 10th:

Gold and Silver – December Review                          

On Monday, gold rose by 0.43% to $1,234.9; Silver, by 0.91% to $19.66 – its highest level in the past several days. During December, gold declined by 1.25%; silver, by 1.71%. In the chart below are the normalized rates of bullion for 2013 (normalized to 100 as of November 11th). The prices of gold and silver have rallied from last week’s fall.

Gold and silver Chart 2013  December 10

The ratio between the two precious metals declined on Monday to 62.82. During December, the ratio slightly rose by 0.47% as silver has moderately under-performed gold.

Gold  to silver ratio Chart 2013  December 10

The gold and silver futures volumes of trade have declined and reached on Monday 85 thousand and 36thousand, respectively. The volume of trade is likely to remain low in the following days. The low volume of trade might enable gold and silver to change course and rally from their recent fall.

On Today’s Agenda

China New Loans: This report will refer to the recent shifts in China’s new loans. According to the previous update, the total loans fell for the first time in three months; this report is another indicator for China’s economic development;

China’s Industrial Production: Based on the previous month’s report, China industrial production slightly rose to an annual rate of 10.3%; if the growth rate further rises, it may suggest China’s economy is progressing faster;

French Industrial Production: This upcoming report will refer to November’s figures. In the last update, the industrial production fell by 0.5% during October;

Great Britain Manufacturing Production: This report will show the annual rate of GB’s manufacturing production as of October; in the last report regarding September 2013 the index bounced back by 1.2% (M-2-M); this news may affect the British Pound;

ECOFIN Summit: The EU ministers of finance will meet and talk about the recent economic developments in EU;

Draghi’s Speech: Mario Draghi, the head of the ECB, will talk at the Bank of Italy’s conference in memory of Curzio Giannini, in Rome. If he refers in this talk to the ECB’s plans of changing its current policy including the LTRO or cash rate, this talk could affect the Euro;

Currencies / Precious Metals Correlations – December Update

On Monday, the Eur/USD currency pair rose by 0.24% to 1.3739. During December, the Eur/USD increased by 1.09%. Further, other currencies such as the Aussie dollar also moderately appreciated yesterday against the U.S dollar by 0.11%. The correlations among gold, silver and Euro have weakened in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.27 during November.  Nonetheless, the decline of the USD against other currencies could positively affect the prices of gold and silver.


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


Tentative – China New Loans

05:30 – China’s Industrial Production

07:45 – French Industrial Production

09:30 – Great Britain Manufacturing Production

All Day – ECOFIN Summit

12:00 – Draghi’s Speech


Tentative – U.S 10 Year Bond Auction

19:00 – U.S. Federal Budget Balance

02:30 – Australia Employment Update

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