Gold and Silver – Daily Outlook September 20


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The prices silver and gold didn't do much yesterday again even though there were sharp falls in other commodities markets most notably the drop in oil prices. Housing starts rose by 2.3% in August while building permits declined. Existing home sales also increased last month. This news may have had a modest effect on the commodities markets. According to the recent HSBC's flash manufacturing PMI of China declined to 47.8 which mean the manufacturing sector is contracting at a faster pace in China. This new may adversely affect commodities rates during the day. On today's agenda: Philly Fed Manufacturing PMI reports, Philly Fed Manufacturing survey, ECB President Speech, GB Retails Sales, Spanish 10 Year Bond Auction, U.S. Jobless Claims update, FOMC member Lockhart's Speech.

On Wednesday, Gold edged up again by 0.03% to $1,771.7; Silver on the other hand decreased by 0.37% to $34.59. During the month, gold increased by 4.98%; silver, by 10.01%.

On Today's Agenda

Philly Fed Manufacturing Index: In the previous August survey, the growth rate increased from -12.9 in July to -7.1 in August. If the index will remain negative it may adversely affect not only U.S Dollar but also American stock indexes, and commodities rates (the recent Philly Fed review);

ECB President Speech: Mario Draghi is likely to refer to the recent German Court ruling, and he may also refer to the future monetary steps the ECB will take in order to jump start the EU economy and lower the borrowing costs of the struggling EU economies such as Spain and Italy;

U.S. Jobless Claims Weekly Report: in the recent report the jobless claims rose by 15k to 382,000; this upcoming weekly report may affect the USD;

Flash German and Euro Area Manufacturing PMI: In the previous report regarding August, the German PMI rose to 45.1 i.e. the manufacturing conditions are still contracting but at a slightly slower pace. This report will provide an indicator to the economic progress of the Euro zone and the leading economies' manufacturing conditions; this news, in turn, might affect the Euro and consequently bullion;

Currencies / Bullion Market - September Update

The Euro/USD remained unchanged on Wednesday at 1.3048. Several other currencies including AUD appreciated against the USD. As seen in the chart below linear correlation among gold, CAD, AUD, and Euro are still mid-strong: during the month, the correlation between gold and EURO/USD was 0.6 (daily percent changes); the correlation between gold and Canadian dollar, -0.72; the correlation between gold and Aussie dollar, 0.63. If the Euro, CAD and AUD will trade down, this could also pull down along with it the prices of bullion.

For further reading:

Gold and Silver | Outlook September 17-21

Gold and Silver Report for September

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets
Referenced Symbols: ABX , GG , NEM , RIO , SLW

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