Gold and Silver – Daily Outlook for December 3rd

The prices of gold and silver tumbled down on the first day of the week. This may have been a strong correction to the sharp rise in bullion prices on Friday. Their recent drop coincided wit the moderate drop of the Euro against the USD. In the U.S, the manufacturing PMI rose again to 57.3 during November – a 0.9 percentage point compared to October. This means, the manufacturing sectors in the U.S are expanding at a faster pace. This positive news may have contributed to the weaker demand for gold and silver as investments. Will gold and silver recover from their recent tumble? On today’s agenda: Australian Retail Sales, Reserve Bank of Australia Cash Rate Statement, and GB Construction PMI.

Here is a short overview for precious metals for Tuesday, December 3rd:

Gold and Silver – December Review                          

On Monday, gold plummeted by 2.26% to $1,222.3; Silver, by 3.72% to $19.26 – its lowest level since August. During November, gold declined by 2.26%; silver, by 3.72%. In the chart below are the normalized rates of precious metals for 2013 (normalized to 100 as of November 11st). The prices of gold and silver have declined in the past couple of weeks.

Gold and silver Chart 2013  December 3The ratio between the two precious metals increased on Monday to 63.48. During November, the ratio rose by 3.14% as silver has moderately under-performed gold.

Gold  to silver ratio Chart 2013  December 3The gold and silver futures volumes of trade have declined and reached on Friday 128 thousand and 35 thousand, respectively. The volume of trade is likely to pick up in the coming days.

On Today’s Agenda

Australian Retail Sales: This monthly update will refer to October 2013. In the recent report, the seasonally adjusted retail sales rose by 0.8% during September; this news may affect the Aussie dollar, which tends to be correlated with gold;

Reserve Bank of Australia – Cash Rate Statement: The last time the RBA cut its cash rate was back in September. The current rate is set at 2.50% – its lowest level in years, which contributed to ongoing downfall of the Aussie dollar against leading currencies such as Euro and USD. The current expectations are that RBA will keep its cash rate flat in this upcoming rate decision;

GB Construction PMI:Great Britain’s construction sector in October 2013 improved as the PMI increased to 59.4 – the construction sector is growing at a faster pace. The upcoming report will refer to November;

Currencies / Precious Metals Correlations – December Update

On Monday, the Eur/USD currency pair fell by 0.36% to 1.3542. During November, the Eur/USD slipped by 0.36%. On the other hand, other currencies such as the Aussie dollar slightly appreciated yesterday against the U.S dollar by 0.04%. The correlations among gold, silver and Euro remained mid-strong in recent weeks, e.g. the correlation between the Euro/USD and gold price is 0.49 during November.  The chart below shows the linear correlations among leading currencies pairs and precious metals percent changes.

Correlation Gold and EURO USD 2013 December 3Here is a reminder of the main events and publications that are scheduled for today and tomorrow (all times GMT):


02:30 – Australian Retail Sales

05:30 – Reserve Bank of Australia – Cash Rate Statement

09:30 – GB Construction PMI


02:30 – Australian GDP Third Quarter 2013

All Day –OPEC Summit

09:30 – GB Services PMI

13:15 – ADP estimate of U.S. non-farm payroll

13:30 – Canadian Trade Balance

13:30 –American Trade Balance

15:00 – Bank of Canada’s Overnight Rate

15:00 – U.S. ISM Non-Manufacturing PMI

15:00 – U.S. New Home Sales

For further reading: