The prices of gold and silver edged down for the second consecutive day. Other commodities also declined. The Euro and Aussie dollar slipped yesterday and may have contributed to the decline of precious metals rates. A couple of U.S reports came out yesterday and showed some signs of slow recovery: the U.S GDP for Q2 was revised up from 1.5% to 1.7% growth; pending homes sales rose in July. Today, the symposium at Jackson Hole will start. The symposium will include Bernanke’s speech tomorrow. On today’s agenda: Italian 30 Year Bond Auction, and U.S. Jobless Claims.
On Wednesday, Gold decreased for the second consecutive day by 0.4% to $1,663; silver also declined by 0.13% to $30.92. During August, gold rose by 3.0%; silver, by 10.78%.
On Today’s Agenda
Jackson Hole Symposium: This Symposium will start today and end tomorrow. It is run by the Federal Reserve of Kansas to be held at Wyoming. The Symposium will revolve around the U.S monetary policy. The main event of the Symposium will be held tomorrow and is the speech of Ben Bernanke regarding the Fed’s monetary policy. I have referred in a recent post about my view regarding the effect of Bernanke’s speech on the bullion market.
U.S. Jobless Claims Weekly Report: in the recent report the jobless claims rose by 4k to 372,000; this upcoming weekly update may affect the U.S dollar and consequently bullion rates;
The Euro/ USD changed direction again and edged down on Wednesday by 0.27% to 1.2531. Further, other currencies including AUD and CAD also depreciated against the USD. The linear correlations among precious metals and Euro are still positive and strong: during August, the correlation between the gold and EURO/USD reached 0.514 (daily percent changes). This means, if these currencies pairs will continue to fall against the USD, it could also pull down the prices of precious metals.
The U.S report regarding the GDP and pending home sales may have slightly affected not only the USD but also bullion rates. But metals traders will continue to wait for tomorrow’s event – Bernanke’s speech that might affect the bullion market. Finally, the U.S jobless claims could also affect not only the USD but also commodities rates if the report will present a sharp shift from last week’s figures.
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