Gold and Silver– May Update
Gold price slipped on Monday by 0. 37% to $1,639.1; silver also declined by 1.02% to $30.12. During the month gold decreased by 1.51% and silver by 2.88%.
In the chart below are the normalized prices of bullion during the past few weeks (gold and silver are normalized to 100 as of April 30th).
The ratio between gold and silver slipped to 54.42. During the month the ratio rose by 1.41% as gold has moderately outperformed silver during the month. In the chart below are the changes of this ratio during May.
Australian Trade Balance Deficit Rose Again in March 2012
According to the recent report regarding March 2012, the seasonally adjusted balance of goods and services expanded from a deficit of $754 million in February 2012 to a $1,587 million deficit in March 2012.
The export of non-monetary gold rose again by $75 million (6%); as gold exports continue to expand, this might suggest a rise in demand for non-monetary gold despite the recent decline in gold prices (see here last report );
On Today’s Agenda
ECB President Draghi Speaks: Following the ECB rate decision to keep in unchanged at 1% the President of the European Central Bank, Mario Draghi will speak; his speech may include the recent events in Europe and may talk about the ECB’s monetary plan if he will refer to implementing LTRO 3 this may affect the Euro/USD, which is strongly linked with gold and silver prices;
Australian Annual Budget Release: this report will outline the government budget of Australia for 2012; if there will be a hike in the budget deficit it could have an adverse effect on the Aussie dollar;
Foreign Exchange / Gold & Silver Market – May Update
The Euro/U.S Dollar slipped again on Monday by 0.24% to 1.3051. During the month so far the Euro/U.S Dollar decreased by 1.42%; on the other hand, the Canadian dollar and Aussie dollar slightly appreciated on Monday against the U.S. dollar by 0.29% and 0.17%, respectively. Since the Euro, Aussie dollar and Canadian dollar are strongly and positively correlated with gold and silver prices (see the chart below for the linear correlations among these currencies of the daily percent changes during April and May), if the U.S dollar will appreciate against these exchange rates; this may continue to affect gold and silver prices to decline. Currently the Euro is decreasing against the USD.
Current Gold and Silver Prices as of May 8th
Gold (June 2012 delivery) is traded at $1,631.1 per t oz. a $8 or 0.49% decrease as of 08:09*.
Silver (June 2012 delivery) is at $29.76 per t oz – a $0.362 or 1.2% decrease as of 08:09*.
(* GMT)
Daily Outlook for May 8th
Gold and silver prices resumed yesterday their downward tend and until there will be a surprise announcement from the Fed of another QE program or a substantially negative report from the U.S, I suspect gold and silver prices will continue their slow paced downward trend. The speech of ECB President might affect the Euro especially if he will refer to the ECB plans to expand their monetary policy. Finally, the Australian budget might affect the Aussie dollar, which is also strongly correlated with gold and silver prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
2:30 – Australian Trade Balance
10:30 – Australian Annual Budget Release
15:30 – ECB President Draghi Speaks
Tomorrow
00:30 – Japan Current Account
15:30 – U.S Crude Oil Stockpiles Report
18:00 – 10 Year Bond Auction
2:30 – Australia Rate of Unemployment
Source :http://www.tradingnrg.com
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