Gold & Silver – Daily Outlook June 28
Gold and silver 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. On today’s agenda: U.S Jobless claims weekly update, U.S. GDP for Q1 (final estimate) and Great Britain Current Account.
Gold 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%.
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: If a decision will be made in the European Council Meeting, 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;
Final Estimate of U.S GDP 1Q: 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 (for the recent estimate of US 1Q GDP).
U.S. Jobless Claims: in the latest report the jobless claims declined by 2k to 387,000; this upcoming weekly update may affect the USD;
Currencies / Bullion – June Update
The Euro/USD declined on Wednesday by 0.18% to 1.2469. Alternatively, other exchange rates including the AUD appreciated on Wednesday against the USD. If the Euro will depreciate against the USD, it may pull down bullion.
Bullion 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. 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 metals prices. The upcoming U.S reports won’t affect much commodities and stocks markets unless they will show a substantial change. I speculate gold and silver will continue to trade with no clear trend and will shift from gain to loss throughout the day.
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