The prices of precious metals resume their downward trend as both gold and silver sharply fell. The recent tumble in precious metals, however, didn’t coincide with the recent depreciation of the USD. The talks between President Obama and House Speaker Boehner in tackling the fiscal cliff continue to pose uncertainty in the financial markets. Will precious metals continue to fall today? On today’s agenda: German Business Climate Survey, Minutes of MPC Meeting, U.S. Housing Starts and Building Permits, and Bank of Japan Monetary Policy Statement.
On Tuesday, the price of gold sharply fell by 1.6% to $1,669; Silver price also declined by 1.85% to $31.61. During the month, gold decreased by 2.4%; silver, by 4.8%.
The ratio between the two precious metals slightly rose on Tuesday to 52.83. During December, the ratio rose by 2.52% as gold slightly out-performed silver.
On Today’s Agenda
Minutes of MPC Meeting: in the previous MPC meeting, the Bank left the rate unchanged at 0.5% and the asset purchase program at £375 billion; the MPC still has concerns regarding GB’s inflation. The minutes of the recent meeting might offer some insight behind this decision;
U.S. Housing Starts: this report was historically correlated with gold– as housing starts rise, gold prices tended to decline the next day (even when controlling to the U.S dollar effect); in the previous monthly report, the adjusted annual rate rose by 3.6% to reach 894,000 in October;
U.S. Building Permits: building permits declined during October by 2.7% (M-o-M) to 866,000. If this report will continue to fall in the building permits rate, it may indicate that the U.S housing market (from this aspect) is pulling down (the recent U.S building permits update);
Bank of Japan –Monetary Policy Statement: Bank ofJapan will announce its interest rate and monetary policy for January. In the previous meeting, BOJ kept the interest rate unchanged at 0 to 0.1 percent, and hasn’t expanded its stimulus plan. If the BOJ will introduce a new monetary stimulus plan it could affect the Yen, other currencies and commodities.
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