Gold and Silver Outlook for June 18
Submitted by Trading NRG as part of our contributors program.
Gold and silver prices haven’t dome much in the past several days as precious metals traders are waiting for to see what the Fed will do next. Today the FOMC meeting will commence will conclude tomorrow with a statement and press conference. Will the Fed decide to change its current policy? Its economic outlook? If so, how will it affect precious metals markets? In a recent article I review the possible outcomes and the potential effect they may have on gold and silver rates. Until tomorrow the low volatility of bullion is likely to persist. On today’s agenda: GB CPI, German ZEW economic sentiment, Inflation Report Hearings, Bank of England Inflation Report, U.S. Housing Starts and building permits monthly report, Japanese Trade balance and U.S core CPI.
On Monday, gold slightly fell by 0.33% to $1,383; Silver also slipped by 0.89% to $21.76. During June, gold declined by 0.69%; silver, by 2.11%.
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The gold and silver futures volumes of trade have declined on Friday to 106 thousand and 52 thousand, respectively – the lowest volume of trade in the past several days. This low volume might pick up tomorrow if the Fed will announce or make any change to its current policy, which will impact precious metals. If the volume will rise in the coming days, this could lead to an increase in volatility of precious metals.
On Today’s Agenda
German ZEW economic sentiment: In April, the ZEW indicator for Germany edged up to 36.4 points; if Germany’s economic sentiment will rally, the Euro will plausibly strengthen against the USD;
U.S. Housing Starts: this report was historically correlated with gold– as housing starts fell, gold tended to rise the next day (even when controlling to the U.S dollar effect); in the recent monthly report, the adjusted annual rate reached 853,000 in April 2013, which was 16.5% below March’s rate;
U.S Core CPI: according to the U.S Bureau of Labor statistics, during April, the CPI declined by 0.4%; the core CPI inched up by 0.1%; the core index rose over the past twelve months by 1.7%;
Japanese Trade balance: In April 2013 the Japanese trade balance deficit fell by 16.9% compared to March, and reach 764 billion yen (roughly $7.79 billion) deficit (seasonally adjusted figures). This is drop in deficit was due to the drop in imports (by 2.4%) and the fact that exports remained flat;
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