Gold and silver prices didn’t do much yesterday as gold edged up while silver slipped. The rise in U.S pending home sales index and U.S core durable goods as indicated in their respective reports, may have contributed to the rise in stocks and commodities prices. The EU Summit will start today. If there will be big headlines coming out of the Summit, it could affect forex and commodities markets. I suspect it will end up to be another storm in a teacup. Currently gold and silver are falling. On today’s agenda: U.S Jobless claims weekly report (update: Jobless claims reached 386k), U.S. GDP for Q1 (update: GDP remained unchanged at 1.9%) and Great Britain Current Account.
Here is a short outlook for gold and silver for Thursday, June 28th:
Precious Metals –June Update
Gold price edged up on Wednesday by 0.22% to $1,578.4; silver on the other hand declined by 0.338% to $27.0. During the month gold increased by 0.91% while silver fell by 2.73%.
The chart below presents the normalized rates of these precious metals during June (normalized to 100 as of May 31st).
This report examines the changes in U.S. orders of durable goods in the manufacturing sector during May. According to the recent report, new orders of manufactured durable goods rose by $2.3 billion to $217.2 billion; shipments, inventories of manufactured durable goods and non-defense new orders of capital goods were all up in May compared to April. This news may have pushed up stocks and commodities rates during yesterday.
U.S. Pending Home Sales Rose in May
According to the recent report the pending home sales index rose by 5.9% (M-over-M). These data are another indicator for the progress of America’s real estate market; based on last week’s results on housing sales (new and existing) the pending sales may continue to fall. In such a case US dollar may further weaken;
On Today’s Agenda
All Day (two days) – European Council Meeting: The European Council Meeting will be held in Brussels and the EU ministers of finance will convene and talk about the recent changes in Europe including in Spain and Greece. If a decision will be made there, it could affect the forex markets; I suspect this Summit won’t be much different from many previous summits and as long as Germany is against Euro bonds there won’t be much progress coming out of this summit;
Great Britain Current Account: This will report will show recent shift in the balance of payment of Great Britain that reached in the recent report to 8.5 billion pound; this report may affect the GBP/USD currency;
Final Estimate of U.S GDP 1Q 2012: In the recent estimate the U.S GDP in the first quarter rose by 1.9%; in the 4Q2011 the GDP growth rate was 3%. If there will be a sharp shift in this estimate it could also affect not only the USD but also commodities rates;
U.S. Jobless Claims: in the latest report the jobless claims declined by 2k to 387,000; this upcoming weekly update may affect the U.S dollar and consequently commodities rates;
Currencies / Gold & Silver Market – June Update
The Euro/US Dollar declined on Wednesday by 0.18% to 1.2469. During the month (UTD) the Euro/U.S Dollar increased by 0.83%. Alternatively, other exchange rates including the Aussie dollar appreciated on Wednesday against the USD by 0.17%. If the Euro will continue to depreciate against the USD, it may pull down bullion rates. Currently the Euro is falling against the USD.
Current Gold and Silver Rates as of June 28th
Gold (July 2012 delivery) is traded at $1,570 per t oz. a $8.4 or 0.53% decrease as of 09:24*.
Silver (July 2012 delivery) is at $26.855 per t oz – a $0.145 or 0.54% decrease as of 09:24*.
Daily Outlook for June 28th
Gold and silver didn’t do much yesterday and the positive reports regarding the U.S economy may have helped rally not only the U.S stocks but also commodities rates including bullion. Today will commence the EU Summit about the debt crisis. If traders will be optimistic about the Summit’s results it could pull up the Euro which could also pressure up precious metals prices. The upcoming U.S reports including jobless claims and U.S GDP won’t affect much commodities and stocks markets unless they will show a substantial change. I speculate gold and silver will continue to trade down throughout the day.
Here is a reminder of the top events and publications that are scheduled for today and tomorrow (all times GMT):
09:30 – Great Britain Current Account
13:30 – Final U.S GDP 1Q 2012 Estimate
All Day (for two days) – European Council Summit
13:30 – U.S. Jobless Claims
15:30 – EIA U.S. Natural Gas Storage Update
Tentative – Italian 10 Year Bond Auction
07:00 – German Retail Sales
08:00 – KOF Economic Barometer
09:00 – Euro Area Monetary Development
10:00 – Euro Area Flash Estimate of Annual Inflation
10:30 –Governor King speaks
13:30 – Canada’s GDP by Industry
2:00– China Manufacturing PMI
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