The prices of gold and silver changed direction again and bounced back on Thursday along with other commodities prices including crude oil and natural gas. Yesterday, U.S jobless claims update came out: number of jobless claims declined by 8k to reach 363k. This news may have contributed to the strengthening of the USD. The American trade balance deficit declined – exports of goods rose by a larger rate than imports had during September. This news was also a positive signs for the progress of the U.S economy and may have helped pull up commodities prices. Nonetheless, there are still concerns in regards to the “fiscal cliff”. In Europe MPC and ECB kept their respective short term rate unchanged. On today’s agenda: UoM Consumer Sentiment, China Industrial Production, and China’s Trade Balance
On Thursday, Gold changed direction and rose by 0.7% to $1,726; Silver also increased by 1.8% to $32.24. During the month, gold increased by 0.4%; silver edged down by 0.24%.
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On Today’s Agenda
China Industrial Production: in the previous report about September the index rose to 9.2%; if the index will continue to rise, it could indicate the Chinese economic activity is expanding;
UoM Consumer Sentiment (preliminary): University of Michigan will publish its preliminary consumer sentiment report; this survey could offer another insight to recent developments in U.S consumers’ sentiment regarding the economy; last time the sentiment index rose again to 83.1;
China’s Trade Balance: as of the previous monthly report, China’s trade balance increased to a $27.7 billion surplus; if the surplus will further expand, it could indicate that China’s economic growth is increasing and thus may positively affect prices of precious metals.
Currencies / Bullion Market – November Update
The Euro/ USD declined again on Thursday by 0.17% to 1.2749. Moreover, some other currencies such as CAD also depreciated yesterday against the USD by 0.37%. As seen in the chart below, linear correlation between gold and Euro/USD is still mid-strong and robust: during October/November, the linear correlation between gold and Euro /USD reached 0.54 (daily percent changes); the linear correlation between the silver and AUD/USD was 0.48 (daily percent changes). Thus, if the Euro and other risk currencies will continue to fall against the USD, they are likely to curb the rally of gold and silver.
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