Gold And Silver Outlook For January 16

by Lior Cohen
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Submitted by Trading NRG as part of our contributors program.

The prices of precious metals continued their upward trend and rose for the second consecutive day. The recent fall of other commodities prices and major risk currencies such as Euro, and Aussie dollar didn’t seem to slow down the rally of precious metals yesterday. From the U.S: retail sales rose by 0.5% in December compared to November. On the other hand, PPI inched down by 0.2%. This news items may have had a modest effect on commodities and stock markets. On today’s agenda: Euro Area CPI, U.S Core Consumer Price Index, U.S. TIC Long Term Purchases and Australia Employment Report.

On Wednesday, the price of gold increased again by 0.87% to $1,683.9; Silver price also rose by 1.34% to $31.5. During January, gold rose by 0.54%; silver, by 4.4%.

On Today’s Agenda

Euro Area CPI: according to the recent report the annual CPI fell to 2.2%, which is slightly higher than ECB’s target inflation; if the inflation will decline again, it could raise the odds of ECB lower its cash rate in the near future;

U.S Core CPI: According to the U.S Bureau of Labor statistics during November, the CPI fell by 0.3% (M-o-M); the core CPI edged up by 0.2%; the core index rose over the last twelve months by 1.9%.

U.S. TIC Long Term Purchases: The report will show the developments in the US long term treasuries for November 2012. In the recent report regarding October 2012, the net foreign sales of U.S Treasuries longer-term notes reached only $1.3 billion;

Australia Employment Report: in the last report regarding November the rate of unemployment declined to 5.2%; the number of employed (seasonally adjusted) rose by 13,900 people; the number of unemployed declined by 16,300 during November compared to October. This report could affect the Aussie dollar (see here the recent report);

Currencies / Bullion Market – January Update

The Euro/ USD changed direction and declined on Wednesday by 0.54% to 1.3306. Moreover, some currencies such as Aussie dollar also depreciated yesterday against the USD by 0.03%. The recent decline of “risk currencies” didn’t seem to curb the rally of precious metals yesterday. Furthermore, the correlations among gold, Euro remained weaker than in the past: during the month, the linear correlation between gold and USD/CAD reached -0.35 (daily percent changes); the linear correlation between the gold and AUD /USD reached 0.37 (daily percent changes). Thus if the Euro and other “risk currencies” will appreciate against the USD, they are might positively affect bullion rates.

For further reading:

Gold and Silver Outlook for January 14-18

Weekly Outlook Financial Markets for January 14-18

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