Gold And Silver Daily Outlook - July 13

Includes: AUD, FXE, GLD, SLV, UDN, UUP
by: Lior Cohen

Gold and silver, much like many other commodities, didn't do much yesterday as both metals moved in different directions for the second consecutive day. U.S. jobless claims declined by 26,000 to 350,000. China's GDP growth rate report for Q2 2012 came out and didn't even meet expectations: China expanded by only 7.6% in annual terms during Q2. During Q1 China's GDP grew by 8.1%. This low growth rate may adversely affect not only commodities rates, but also exchange rates such as the Aussie dollar. On today's agenda are the U.S core PPI and University of Michigan Consumer Sentiment.

Gold decreased again on Thursday by 0.66% to $1,565.3. Silver, on the other hand, rose by 0.51% to $27.16. During July, gold declined by 2.42% and silver by 1.63%. Furthermore, the SPDR Gold Shares (NYSEARCA:GLD) edged down by 0.4 and reached 152.59 by July 12. Currently, GLD is rising by nearly 1.16%.

The chart bellow shows the normalized rates of these precious metals during July (normalized to 100 as of June 29).

Click to enlarge image.

Click to enlarge

On Today's Agenda

U.S. Core PPI: In the previous report regarding May, this index for finished goods fell by 1% compared with April's rate and rose by 0.7% in the last 12 months. This news might affect bullion.

University of Michigan Consumer Sentiment (preliminary): University of Michigan will issue its preliminary consumer sentiment survey; this report could offer another perceptive to recent changes in U.S. consumers' sentiment about the economy. The last time the sentiment index fell to 74.1.

Currencies/Bullion Market -- July Update

The euro/USD fell on Thursday by 0.29% to 1.2203. Furthermore, other exchange rates such as the AUD also depreciated on Thursday. The linear correlation between gold and euro/USD is 0.65 (daily percent changes, for June/July). If the euro/USD and AUD/USD will continue to decrease, it could pull down precious metals rates.

Daily Outlook

The results of China's GDP report might affect the commodities markets during the day. The disappointing growth raised speculation that China might introduce a stimulus plan to jump start its economy. The U.S. core PPI could affect bullion rates as indicated above. Finally, if the euro and other risk currencies such as AUD/USD continue to fall, then they are likely to also drag down bullion.

For further reading, check out this article: "Gold and Silver Outlook for July."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.