Gold And Silver Daily Outlook For August 13, 2012

Aug.13.12 | About: SPDR Gold (GLD)

The prices gold and silver edged up during last week, and I suspect this trend will continue in the days to follow. As I have pointed out in the precious metals weekly outlook the main events of the week will revolve around the U.S Philly Fed, CPI and EU GDP for Q2 2012. There are speculations around the future steps of ECB and Bank of China in regards to their respective plan to issue a monetary stimulus; these speculations could have some marginal effect on forex and commodities markets. On today's agenda: Minutes of BOJ monetary policy meeting. Let's examine what is up ahead for gold and silver:

On Friday, Gold edged up by 0.16% to $1,622.8; Silver slipped by 0.12% to $28.06. During August, gold rose by 0.51%; silver, by 0.53%. Furthermore, on Friday the SPDR Gold Shares (NYSEARCA:GLD) also edged up by 0.19% and reached 157.18 by August 10th.

As seen below, the chart shows the changes of normalized prices of precious metals in the last few weeks (normalized to 100 as of July 31st). During the past few weeks gold and silver had a moderate upward trend.

(click to enlarge)Click to enlarge

On Today's Agenda

Minutes of BOJ monetary policy meeting: Following last week's BOJ monetary policy meeting - the Bank decided to leave its policy unchanged; BOJ will publish the minutes of that meeting. If the minutes will reveal any hints about the future steps of BOJ, it may affect the Japanese yen and consequently bullion prices.

Currencies / Bullion Market -August Update

The Euro/USD edged down again on Friday by 0.13% to 1.229. Further, other currencies including Aussie dollar also depreciated on Friday against the USD by 0.03%. The linear correlation between gold and Euro is still robust: during the month, the correlation between the gold and EURO/USD was 0.607 (daily percent changes). Therefore, if the Euro will continue to trade down against the USD, it could eventually pull down precious metals.

Daily Outlook for August 13th

Gold and silver rose during recent weeks, but not by much. This trend may continue during the days that follow. There are several U.S. reports that will be released during the week that may affect not only the USD but also bullion prices. These reports include: housing starts, Philly Fed index, core CPI and PPI. There are speculations about China's next step in regards to its monetary policy that has already influenced some commodities traders. There are reports of speculators cutting their gold holdings, but I don't think it will affect commodities prices much until an actual decision will be made. Many forex and commodities traders are waiting for the next move of ECB President Mario Draghi in issuing monetary easing, which I suspect will eventually be announced in the days or weeks that follow. Finally, if the Euro and other "risk currencies" will rally during the week it could contribute to the recovery of precious metals rates.

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