According to the recent consumer confidence survey in the US, the consumer confidence index has declined during June; this index declined during May as well. This survey shows the confidence of American consumers in US businesses; the total index declined mainly because there was an increase in people who answered that the business conditions are “bad”.
This consumer confidence index might be among the reasons for the recent rise in gold and silver prices during the day: according to a paper by Roache et. al (2008) a working paper on the effects of news on commodities prices including gold prices, there was a negative significant coefficient for “consumer confidence” as it apparently has a negative linear affect on gold prices; it also has a positive linear affect of US dollar.
Since the recent consumer confidence survey presented negative news, it should have, according to the research, a positive effect on gold and silver prices and a negative effect on US dollar. Currently, this seems to be the case as gold and silver prices are traded up and US dollar is traded down.
Current Nymex crude oil price, short term futures (July 2011 delivery) is traded up by 0.98%, at $92.58 per barrel as of 19:16*.
Current gold price, short term futures (July 2011 delivery) is traded at $ 1,499.40 per t oz. a $3 increase or 0.20%, as of 19:16*.
Euros to USD is currently traded up at 1.4360 a 0.5099% decrease as of 19:27*.
The USD to Canadian dollar exchange rate is traded down at 0.9831 a 0.3027% decrease as of 19:27*.
(* GMT)
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