Gold and silver remained virtually unchanged on the first day of the week as the Euro, Yen and other currencies remained unchanged yesterday. Yesterday’s Euro-group meeting was concluded with little headway as the EU ministers of finance approved Greece’s budget but postponed its decision of approving the next loan tranche to next week. Currently, the prices of gold and silver are falling. On today’s agenda: European Council Meeting, Great Britain CPI, German ZEW economic sentiment, BOE Inflation Estimate and U.S. Federal Budget Balance.
Here is a short outlook for precious metals for Tuesday, November 13th:
Precious Metals –November Update
On Monday, Gold remained unchanged at $1,730.9; Silver slipped by 0.25% to $32.52. During the month, gold increased by 0.69%; silver, by 0.63%.
As seen below, the chart shows the developments in the normalized prices of bullion during November (normalized to 100 as of October 31st). During the past couple of weeks, both gold and silver zigzagged with an unclear trend.
The ratio between the two precious metals edged up on Monday to 53.23. During November the ratio edged up by 0.05% as gold slightly out-performed silver.
On Today’s Agenda
European Council Meeting: In the European Council Meeting the EU ministers of finance will meet and talk about the recent monetary developments in Europe; this could include Greece’s eligibility to receive the next bailout package;
U.S. Federal Budget Balance: this report indicates the government debt growth and thus may affect the U.S dollar. In the previous report referring to September, the deficit declined by $75 billion to a deficit of $1,089 billion for the fiscal year of 2012; this is a decrease of 16% compared to the last fiscal year;
German ZEW economic sentiment: According to the previous report regarding October the ZEW indicator for Germany increased to -11.5 points; if Germany’s economic sentiment won’t present signs of improvement, the Euro will plausibly remain weak against other currencies including the USD;
Great Britain Consumer Price Index: some expect the inflation rate had further dwindled; in the recent report regarding September the annual CPI decreased from 2.5% to 2.2%; this news might affect the British pound, which is also linked with commodities prices;
BOE Inflation Estimate: this report will present the yearly rate of GB’s inflation according to Bank of England and will be published as a letter only if the inflation is above 3% or below 1%;
Currencies / Bullion Market – November Update
The Euro/ USD remained unchanged on Monday at 1.271. During the month, the Euro/USD fell by 1.92%. Conversely, some currencies such as Aussie dollar appreciated yesterday against the USD by 0.39%. This mixed trend might have contributed to different directions gold and silver took yesterday. As seen in the chart below, the correlation among gold silver, Euro and Aussie remains mid-strong and robust: during October and November, the linear correlation between gold and Euro /USD reached 0.53 (daily percent changes); the linear correlation between the silver and Aussie /USD was 0.45 (daily percent changes). Thus, if the Euro and other risk currencies will decline today against the USD, they are likely to pull down gold and silver.
Current Gold and Silver Rates as of November 13th
Gold (December 2012 delivery) is traded at $1,725.6 per t oz. a $5.3 or 0.31% decrease as of 06:00*.
Silver (December 2012 delivery) is at $32.31 per t oz – a $0.21 or 0.65% decrease as of 06:00*.
(* GMT)
Daily Outlook for November 13th
The rates of precious metals started off the week on a negative note as silver slightly declined. Yesterday the EU ministers of finance accepted Greece’s new approved budget adjustments but postponed the decision on the extension of next loan tranche for next week. There are still concerns over the fiscal cliff that the U.S economy is facing. The slow trading in the forex market was also reflected in the little movement in the precious metals market. This low volatility is likely to continue today. The upcoming publication of the U.S federal budget could offer some perceptive behind the direction of the debt accumulation in the U.S. If the European council meeting will bring some headlines regarding Greece, this could help rally the Euro. Finally, if the Euro and other “risk currencies” will depreciate against the USD, then they are likely to pull down precious metals.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
Today
All Day – European Council Meeting
09:30 – Great Britain CPI
10:00 –German ZEW economic sentiment
Tentative – BOE Inflation Estimate
19:00 –U.S. Federal Budget Balance
Tomorrow
09:30 – Claimant Count Change
10:00– Euro Area Industrial Production
10:30 –Governor King speaks
13:30 – U.S. Producer Price Index
13:30 –U.S. Retail Sales Report
15:30 – U.S Crude Oil Stockpiles Report
19:00 – Minutes of October’s FOMC Meeting
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