The prices of gold and silver eased down from their high volatility from the beginning of the week. Their prices moved in different directions: gold slightly rose while silver continued to decline. In the Forex market, the leading risk currencies such as the Euro depreciated against the USD. Yesterday, several U.S reports came out that didn’t stir up the market: jobless claims weekly update came out and showed initial claims rose by 4k to reach 352k. The Philly Fed survey for April presented a slight drop in the index from 2 in March to 1.3 in April.
Will gold and silver change trade up? Currently, gold and silver are rising. On today’s agenda: Canada’s core CPI, IMF Summit and G20 Meeting.
Here is a short outlook for precious metals for Friday, April 19th:
Precious Metals – April Update
On Thursday, the price of gold rose by 0.71% to $1,392; silver decreased again by 0.27% to $23.25. During April, gold declined by 12.72%; silver, by 17.84%.
In the chart below are the normalized rates of gold and silver for April (normalized to 100 as of March 28th). The prices of gold and silver have had a downward trend during the month.
The ratio between the two precious metals increased again on Thursday to 59.88. During April the ratio rose by 6.23% as gold out-performed silver.
The U.S long term treasuries yields fell again during the week (10 year notes reached 1.72% yield by Thursday). Since the beginning of the month the (10 year note) yield fell by 0.11 pp to its lowest level this year. This is another indication for the shift in market sentiment towards risk aversion, in which gold isn’t considered a safe haven investment.
On Today’s Agenda
Canada’s core CPI: This news might affect the direction of the Canadian dollar, which tends to be strongly linked with the prices of gold and silver.
G20 Meeting: The leading ministers of finance will convene for a two day meeting. The meeting might affect the financial markets if there will be big headlines coming out of this summit;
Currencies / Bullion Market – April Update
The Euro/ USD rose on Thursday by 0.13% to 1.3050. During April, the Euro/USD rose by 1.83%. Moreover, other currencies such as the Aussie dollar and Canadian dollar also slightly appreciated yesterday against the U.S dollar by 0.06% and 0.01%, respectively. The rise of leading currencies against the U.S dollar may have had little to do with the recovery of gold yesterday. The correlations among gold, Euro and Aussie dollar strengthened for April: the linear correlation between gold and Euro/USD was 0.54 (daily percent changes); the linear correlation between the gold and AUD/USD recent 0.69 (daily percent changes). These correlations imply the recent decline of precious metals rates was slightly related to the developments in the foreign exchange markets.
Current Gold and Silver Rates as of April 19th
Gold (short term delivery) is traded at $1,417.3 per t oz. a $23.2 or 1.67% increase as of 04:34*.
Silver (short term delivery) is at $23.67 per t oz – a 1.42% increase as of 04:34*.
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 – IMF and G20 Meeting
For further reading: