The prices of gold and silver changed direction and increased yesterday. The recent publication of the minutes of the FOMC meeting from back in October didn’t offer much insight regarding the next move of the FOMC. A couple of U.S reports were published yesterday: the U.S PPI edged down by 0.2% mainly due to the fall in energy prices; the U.S retail sales also declined by 0.3% during October. This news may have contributed to the moderate rise of gold and silver prices. On today’s agenda: Retails Sales GB, U.S Core Consumer Price Index, Euro Area CPI, U.S. Jobless Claims Weekly Report, Philly Fed Manufacturing Index, and Bernanke’s speech.
St. Deviation of Gold and Silver
The high volatility of both bullion rates from the beginning of the month has changed and in recent days these metals have had a low volatility: during the month, the standard deviations of gold and silver (daily percent changes) reached 1.01 % and 1.91%, respectively. These figures are still higher than the standard deviations of these precious metals from previous months.
On Today’s Agenda
Bernanke’s Speech: Bernanke’s speech might offer some insight behind the Fed’s future monetary steps. The Chairman of the Federal Reserve will give a speech at the HOPE Global Financial Dignity Summit, Atlanta, Georgia. The title of the speech is “Housing and Mortgage Markets”;
Philly Fed Manufacturing Index: In the October survey, the growth rate rose to +5.7 in October. If the index will continue to rise it may positively affect not only U.S Dollar but also bullion;
Daily Outlook
Precious metals changed direction and slightly increased yesterday. This rally, however, might not last long and could change direction again during the day. In any case, the low volatility in the prices of precious metals is likely to continue in the days to follow. There are some events that could pull up gold and silver: The upcoming speech of Bernanke might pull up the prices of bullion, if he will refer to the future plans of the Fed mainly with respect to the upcoming fiscal cliff the U.S is facing. The upcoming publication of the U.S jobless claims, and Philly Fed manufacturing survey could affect the USD. If these reports will continue to show signs of progress in the U.S economy this could help rally not only the USD, but also commodities prices and major stock indexes.
For further reading:Gold and Silver Monthly Report for November
By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG
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