Submitted by
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.
Gold & Silver - Daily Outlook July 5
Following the U.S Independence Day holiday there are many
publications and reports that will come out today that could
affect the bullion markets. ECB will announce the interest rate
for July. Some speculate the ECB could lower the interest rate by
0.25%. Other items on today's agenda: Spanish 10 Year Bond
Auction, ADP estimate of U.S. payroll report, U.S. Jobless
Claims, and U.S. ISM Non-Manufacturing PMI.
The complete daily outlook of gold and silver
for July 5th
Gold increased on Tuesday by 1.51% to $1,621.8; silver also rose
by 2.84% to $28.28. During July, gold rose by 1.1% and silver by
2.42%. Furthermore, yesterday the SPDR Gold Shares (
GLD
) also rose by 1.52% and reached by July 3rd 157.46.
On Today's Agenda
ECB Rate Decision: In previous interest rate decision Mario
Draghi left the EU interest rate flat at 1%; some already speculate
there might be a rate cut which will affect the Euro/USD exchange
rate that is strongly linked with bullion rates;
U.S. Jobless Claims Weekly Report: in the latest report the
jobless claims edged down by 6k to 386,000; this upcoming weekly
report may affect the U.S dollar and consequently commodities
rates;
U.S. ISM Non-Manufacturing PMI: During May 2012 this index edged
up to 53.7% - this still means the non-manufacturing is expanding
and at a slightly faster pace than before; this index may affect
forex and commodities trading;
American Stock Markets / Bullion- July
The S&P500 rose on Tuesday by 0.62% to 1,374.02. The linear
correlation between S&P500 and gold has started to pick up and
rise. During the last month the linear correlation was 0.54 which
is strong and robust. The relation between silver and SNP500 is
very similar. These relations however aren't constant and vary over
time as indicated in the chart below. Nonetheless if these strong
and positive relations will hold up they could suggest that if
S&P500 will continue to rally, then bullion rates are likely to
follow.
Currencies / Bullion - July Update
The Euro/ USD slightly declined on Wednesday by 0.63% to 1.2528.
Further, other rates including the AUD also depreciated on
Wednesday. There is still a very high linear correlation between
Euro/USD and gold. If the Euro/USD will continue to trade down, it
could adversely affect bullion rates.
Daily Outlook
If ECB will lower the interest rate, this decision could
adversary affect not only the Euro/USD, but also bullion rates.
The U.S reports including jobless claims and ISM
Non-Manufacturing PMI might also affect commodities and forex
markets. If these reports won't be positive they may positively
affect precious metals.
For further reading:
Weekly Outlook Financial Markets for July 2-6
Gold & Silver | Weekly Outlook July 2-6