The prices of gold and silver continued their downfall as both metals declined again yesterday for the second consecutive day. The recent U.S housing report showed little change in the housing market and thus may also have a moderate effect on the USD and precious metals. BOJ is expected to deliver its third monetary injection in the past four months. This news is likely to further weaken the yen against the USD. This news could also affect bullion rates via the foreign exchange market. The budget talks between U.S government officials seem to stagnate with little progress. Will precious metals further fall today? On today’s agenda: Retails Sales reports for GB and Canada, Final U.S GDP 3Q 2012 Estimate, U.S. Jobless Claims, U.S. Existing Home Sales, and Philly Fed Manufacturing Index.
On Wednesday, the price of gold declined again by 0.19% to $1,666; Silver price also fell by 1.78% to $31.05. During the month, gold decreased by 2.58%; silver, by 6.5%.
St. Deviation of Gold and Silver
Precious metals rates’ volatility has slightly subsided yesterday, which resulted in a moderate decrease in both metals’ standard deviations of their daily percent change. Nonetheless, the daily percent change standard deviation of silver is still higher this month compared to previous months: the standard deviations of gold and silver (daily percent changes) reached 0.76% and 1.89%, respectively.
Currencies / Bullion Market – December Update
The Euro/ USD edged down on Wednesday by 0.02% to 1.3227. Moreover, several currencies such as Aussie dollar also depreciated again yesterday against the USD by 0.51%. The correlations among gold, Euro and Aussie dollar have weakened during the month: during the past several weeks, the linear correlation between gold and Euro /USD declined to 0.08 (daily percent changes). This weak correlation might suggest the daily changes in precious metals didn’t coincide with the developments in major currencies market. Nonetheless, if the Euro and other risk currencies will bounce back and rise against the USD, they are likely to positively affect precious metals.
On Today’s Agenda
Final U.S GDP 3Q 2012 Estimate: In the previous estimate, the U.S GDP during the third quarter expanded by 2.7%, which was close to the figure anticipated; in the second quarter, the GDP growth rate was only 1.3% (annual rate). If there will be a sharp change in the growth rate from second to third estimate, this could affect precious metals rates;
U.S. Jobless Claims Weekly update: in the previous report the jobless claims declined again by 29k to reach 343k; this upcoming weekly update may affect the U.S dollar;
Philly Fed Manufacturing Index: In the November survey, the growth rate declined from +5.3 in October to -10.7 in November. If the index will continue to fall it may adversely affect not only U.S Dollar but also bullion prices (the previous Philly Fed review);
For further reading: