Gold & Silver – Daily Outlook May 24
Gold and silver tumbled down again along with other commodities. The Euro/USD reached yesterday its lowest level in nearly two years. The speculation around the future of Greece in the EU is likely to be among the factors dragging down not only the Euro but also metals. The U.S new home sales rose in April. The recent Summit of the European Leaders didn’t bring big headlines as German Chancellor Merkel still opposes a jointly issued EU bond.
- Barrick Prepares For Sluggishness In Gold Prices As Fed Raises Interest Rates
- Weakness In Commodity Prices Presents An Opportunity To Precious Metal Streaming Companies
- Barrick Continues To Make Smart Moves In Response To Subdued Gold Pricing Environement
- Barrick Gold’s Q3 Earnings Review: Cost Reduction Partially Offsets Impact Of Lower Gold Prices
- Barrick Gold’s Q3 Earnings Preview: Lower Gold Prices To Negatively Impact Results
- The Fed’s Decision To Keep Interest Rates Unchanged Is A Welcome Reprieve For Gold Miners
On today’s agenda: U.S core durable goods, German Business Climate Survey, ECB President Draghi Speaks, U.S. Jobless Claims, and GB revised GDP Q1 2012.
Gold tumbled down again on Wednesday by 1.79% to $1,548.4; silver also decreased by 2.34% to $27.52. During the month gold declined by 6.96% and silver by 11.27%.
On Today’s Agenda
U.S Core Durable Goods: This report may indirectly show the shifts in U.S. demand for commodities. According to previous report for March, new orders of manufactured durable goods decreased by $8.4 billion to $203 billion; if this report will continue to be negative then it could curb the recent appreciation of the USD;
U.S. Jobless Claims Weekly Report: in the latest report the jobless claims remained unchanged at 370,000; this upcoming weekly report may affect the USD;
ECB President Draghi Speaks: The President of ECB, Mario Draghi will talk at Bank of Italy in Rome. Given the recent political changes in Greece and tumble of the Euro, if Draghi will refer to the speculation around the Greek debt crisis and the stands of ECB on the current situation this could affect the forex and commodities markets;
U.S. Treasuries / Gold– May
The U.S. 10-year Treasury yield resumed their descent on Wednesday and reached 1.73%. This decline in LT securities yields may indicate that the demand for “secure investments” continue to increase especially considering the developments in Europe. During May there was a low and positive correlation between the daily changes in U.S. long term Treasury yield and shifts in gold. Nevertheless the trend of both indexes as seem in the chart below shows that both U.S. 10 yr yield and gold have a downward trend during the month.
Daily Outlook for May 24th
Bullion continued their downward trend during yesterday’s trading. The recent news of the rise in U.S new home sales along with the speculation around the future of Greece in the EU may have driven precious metals prices down. The upcoming report on the core durable goods and jobless claims might continue to play a role in direction of metals. If these reports will be positive metals might continue to trade down. Finally the upcoming German business climate survey might further pull down the Euro since the survey came out negative.
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