Gold and Silver Outlook for December 5

by Trading NRG
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Submitted by Trading NRG as part of our contributors program.

The prices of gold and silver continue to zigzag as both metals tumbled down. Other leading commodities prices such as crude oil and natural gas also fell yesterday. Will gold and silver further fall? The recent decision of RBA to cut its cash rate by 0.25pp to reach 3% is another step the central bank has taken to help recovery the Australian economy. On the other hand, Bank of Canada left its cash rate unchanged at 1%. On today’s agenda: ADP estimate of U.S. non-farm payroll, U.S. ISM Non-Manufacturing PMI, Spanish 10 Year Bond Auction and Australia Employment Report.

On Tuesday, the price of gold fell by 1.49% to $1,694.4; Silver price also tumbled down by 2.89% to $32.73. During the week, gold declined by 0.92%; silver, by 1.442%.

The ratio between the two precious metals rose on Tuesday to 51.76. During the week the ratio edged up by 0.46% as gold out-performed silver.

Currencies / Bullion Market – December Update

The Euro/ USD increased again on Tuesday by 0.31% to 1.3094. As stated in the past, the correlations among gold, Euro and Aussie are still strong even thought they have recently weakened: during November and December, the linear correlation between gold and Euro /USD reached 0.42 (daily percent changes); the linear correlation between the silver and AUD /USD was 0.35 (daily percent changes). Thus, if the Euro and other risk currencies will rise again against the USD, they are likely to pull up bullion.

On Today’s Agenda

ADP estimate of U.S. non-farm payroll: ADP will publish its projection for the upcoming U.S non-farm payroll change for November 2012 in anticipation for the upcoming no-farm report to be published by the end of the week;

U.S. ISM Non-Manufacturing PMI: During October this index edged down to 54.2% – this means the non-manufacturing is growing and at a slightly slower rate than in the previous month; this index may affect forex and commodities;

Australia Employment Report: in the last report regarding October the rate of unemployment remained at 5.4%; the number of employed (seasonally adjusted) slightly rose by 10,700 people; the number of unemployed declined by 8,800 during October compared to September. This report could affect the AUD (see here the recent report);

For further reading:

Gold and Silver Outlook for December

Gold and Silver Outlook for December 3-7

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