The prices of gold and silver rallied during most of last week. Will gold and silver continue to rise? The recent decision of Bank of Japan to double its inflation target to an annual 2% rate is another indictor for the Bank’s decision to implement its expanding monetary policy. BOJ also said it will intensify its asset purchase program next year by purchasing nearly 13 trillion yen per month starting January 2014. This news is likely to adversely affect the yen against the USD. This news may also affect precious metals via the forex markets. On today’s agenda: German ZEW economic sentiment, GB 10 Year Bond Auction, Canada Retails Sales, U.S. Existing Home Sales, ECB President Speaks, and Australia’s CPI for Q4 2012.
On Friday, the price of gold inched down by 0.22% to $1,687; Silver price, on the other hand, rose by 0.43% to $31.92. During the month, gold rose by 0.73%; silver, by 5.8%.
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St. Deviation of Gold and Silver
The slow movement of both bullion rates is represented in the decline in precious metals prices’ volatility during January: the standard deviations of gold and silver (daily percent changes) reached 0.89% and 1.54%, respectively.
On Today’s Agenda
German ZEW economic sentiment: In December the ZEW indicator for Germany rose to reach 6.9 points; if Germany’s economic sentiment will further expand, the Euro will plausibly strengthened against other currencies including the USD;
GB 10 Year Bond Auction: the British government will have another monthly bond auction; in the previous bond auction, which was held during the second week of December, the average rate reached 1.8% – a slightly lower rate than in the previous auction;
Canada Retails Sales: This report will pertain to the retails sales in Canada as of November. It may affect the direction of USD/CAD currency pair, which is strongly correlated with commodities prices. In the previous report regarding October 2012, retails sales rose by 0.7%;
U.S. Existing Home Sales: in the previous report regarding November 2012 the number of homes sold rose to a seasonally adjusted annual rate of 5.04 million houses sold; if this trend will continue it may pull up the U.S dollar.
ECB President Speaks: Mario Draghi will give a speech in the New Year’s Reception in Frankfurt. He is likely to refer to the progress of the EU economy. If the ECB President will refer to ECB’s monetary policy this might affect the Euro;
Australia’s CPI for Q4 2012: This quarterly report will refer to the changes in the consumer price index. In the recent report regarding the third quarter, the CPI rose by 1.4% compared to the second quarter and by 2% compared to Q3 2011; this report could affect the Aussie dollar which is linked with commodities;
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