The prices of gold and silver bounced back and slightly increased yesterday after they had declined during most of the days in the past couple of weeks. The recent U.S jobless claims report showed a drop of 12k in jobless claims to reach 350k. Moreover, U.S real estate market showed some signs of growth as the U.S new home sales increased by 4.4% during November to reach 377k. On the other hand, consumer confidence report declined in December to 65.1 compared to 71.5 in November. This news may have had a mixed effect on the commodities markets during yesterday. Will gold and silver resume their downward trend? On today’s agenda: Italian 10 Year Bond Auction, French Consumer spending and U.S pending home sales.
On Thursday, gold slightly increased again by 0.17% to reach $1,659.9; the price of silver, also increased by 0.67% to reach $30.18. During the month, gold declined by 2.82%; silver, by 9.1%.
The gold and silver futures volumes of trade have increased yesterday to 111 thousand and 38 thousand, respectively. This is a rise from the low trading volume recorded a day earlier. If the volume will continue to rise, this could suggest the odds of sudden sharp shifts in the prices of gold and silver due to low volume would fall.
On Today’s Agenda
U.S. Pending Home Sales: in the last update, the pending home sales index rose by 5.2% (M-over-M). These data are another indicator for the progress in America’s housing market; if the housing data will show further growth it may pull up the U.S dollar;
French Consumer Spending: This report examines the developments in the changes in inflation adjusted value of goods consumed; in the previous report, the index edged down by 0.2% (month-over-month); this report may affect the Euro;
The recent U.S reports including new home sales and jobless claims may have contributed to the strengthening of the USD against some currencies and thus may have curbed the recent rise in the prices of gold and silver. Nonetheless, as long as the movement of precious metals remains low, this could be just a matter of market shifts or noise. The FOMC decisions launch QE3, QE3 plus didn’t seem to rally the price of precious metals for now and might start to positively affect them in the months to follow. The debates around the fiscal cliff also seem, for the time being, to have little effect on precious metals or foreign exchange rates. The upcoming reports regarding U.S pending home sales, and French consumer spending could affect not the USD and Euro, respectively Moreover, if pending home sales will show the U.S economy is expanding, it could pull down gold and silver
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