Gold and Silver Outlook for October 30
Submitted by Trading NRG as part of our contributors program.
The prices of gold and silver started off the week on a negative note as both declined on Monday. Will precious metals continue their downward trend during the week? HurricaneSandy will keep the trading inNew York closed. The forex trading, however, will continue and precious metals will trade in Asian markets and OTC. In any case, this Hurricane is likely to curb the volatility of gold and silver throughout the week. On today’s agenda: Bank of Japan Monetary Policy Statement, Italian 10 Year Bond Auction ECB President Speaks, and Bank of Japan Outlook Report.
On Monday, Gold declined by 0.19% to $1,708; Silver also fell by 0.91% to $31.75. During the month, gold decreased by 3.68%; silver, by 8.19%.
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On Today’s Agenda
U.S Consumer Confidence: according to the recent monthly report, the consumer confidence index rose in September (M-o-M). The current expectations are that the October index may fall; this report might affect commodities markets;
Tentative – Bank of Japan –Monetary Policy Statement: Bank of Japan will announce its monetary policy for the November. Last month BOJ left the interest rate unchanged at 0 to 0.1 percent, and hasn’t added any additional funds to its stimulus plan. If the BOJ will introduce a new monetary stimulus plan it could affect the Yen, other currencies and commodities prices;
ECB President Speaks: Mario Draghi will participate in Macro- Research Network of the European System of Central Banks, to be held inFrankfurt. In anticipation for next week’s ECB rate decision, the ECB President might refer to the monetary policy of the ECB and he’s outtake on the future steps of the ECB in relation to Spain’s debt problems;
Currencies / Bullion Market – October Update
The Euro/ USD declined on Monday by 0.28% to 1.2903. Further, some currencies such as Aussie dollar also depreciated during last week against the USD. As seen in the chart below, the correlation between gold and Euro remains mid-strong and positive: during the past several weeks, the linear correlation between gold and EURO/USD reached 0.56 (daily percent changes). My guess these currencies pairs will continue their downward trend in the days to follow; in any case, if the Euro and other risk currencies will decline against the USD, they are likely to pull down precious metals.
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