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Gold and silver prices increased during most of last week. Will the recent rally of precious metals prices continue this week? As I have stated in the precious metals weekly outlook, there are several events and reports that may influence precious metals traders this week. These items include: U.S GDP, core durable goods report, EU Summit, and U.S housing data (new and pending home sales reports. On today's agenda: Euro-group Summit.

On Friday, the price of gold sharply rose by 1.34% to $1,751.4; Silver price also increased by 2.02% to $34.12. During the previous week, gold rose by 2.1%; silver, by 5.4%. Moreover, during last week, the SPDR Gold Shares (NYSEARCA:GLD) also increased by 2.3% and reached by November 23rd 169.61.

As seen below, the chart shows the changes in the normalized prices of precious metals during the past several weeks (normalized to 100 as of October 18th). During recent days the prices of precious metals had an upward trend.

(click to enlarge)

On Today's Agenda

Euro-group Summit: Following last week's Summits, in which the EU leaders couldn't reach an agreement on the multi-year budget for the EU or for the Greek bailout, this week's Summit might result in a resolution in regards to the Greek bailout. There were several reports that the EU ministers of finance, ECB members and IMF representatives are closing the gaps among these parties' standings vis-à-vis the Greek bailout. If the EU will approve this bailout, this may help pull up the Euro, which is strongly linked with gold and silver.

Currencies / Bullion Market - November Update

The Euro/ USD also rose on Friday by 0.67% to 1.2972. During last week, the Euro/USD rose by 1.8%. Moreover, some currencies such as Aussie dollar also appreciated during last week against the USD by 1.16%. This upward trend of these "risk currencies" may have contributed to the rally of bullion market during last week. The correlations among gold, Euro and Aussie slightly strengthened in recent days: during the past several weeks, the linear correlation between gold and Euro /USD reached 0.57 (daily percent changes); the linear correlation between the gold and AUD /USD was 0.55 (daily percent changes). Thus, if the Euro and other risk currencies will continue to rise against the USD, they are likely to positively affect gold and silver.

Daily Outlook

The prices of gold and silver rose during last week, mainly on Friday. I suspect there might be a correction on the first couple of days of the week, but I still think the recent upward trend from last week will continue this week. If the EU Group meeting will result in approving the Greek bailout, it could contribute to the rise of the Euro and by extension bullion prices. The upcoming U.S reports including: housing data (new and pending home sales), core durable goods, and second estimate of GDP for the third quarter, could affect not only the USD but also bullion prices. If these reports will show the U.S economy isn't progressing, they could raise the chances of the Fed intervening again in the U.S financial markets. This, in turn, could contribute to the upward trend of precious metals prices. Finally, if the Euro and other "risk currencies" will continue to rise against the USD, then they are likely to pull up precious metals.

For further reading: Gold And Silver Outlook For November 26-30

Source: Gold And Silver Outlook For November 26, 2012