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Guest Commentary: Gold & Silver Daily Outlook 11.27.2012

By By Lior Cohen, Commodities Analyst at Trading NRG
27 November 2012 12:59 GMT

The prices of gold and silver remained nearly unchanged on the first day of the week. The low volatility in the precious metals markets was also the case in other commodities, foreign exchange and stock markets. This low volatility is likely to continue in the days to follow. The EU ministers of finance finally reached an agreement regarding the Greek bailout. One of the details agreed upon was that Greece will cut its debt/GDP ratio to 124% by the year 2020. Greece was also cleared to receive 34.4 billion euro as a loan during December. This news is likely to pull up the Euro. On today's agenda: U.S Core Durable Goods, GB revised GDP Q3 2012, and U.S Consumer Confidence.

On Monday, the price of gold edged down by 0.1% to $1,749.6; Silver price increased by 0.06% to $34.14. During the month, gold rose by 1.77%; silver, by 5.63%.

Currencies / Bullion Market – November Update

The Euro/ USD remained unchanged on Monday at 1.2972. Moreover, some currencies such as Aussie dollar slightly appreciated yesterday against the USD by 0.04%. The recent decision of the EU ministers of finance regarding the Greek bailout is likely to pull up the Euro and other "risk currencies". As seen in the chart below, the correlations among gold, Euro and Aussie are still strong and positive: during November, the linear correlation between gold and Euro /USD reached 0.56 (daily percent changes). Thus, if the Euro and other risk currencies will continue to trade up against the USD, they are likely to pull up gold and silver.

Gold_and_Silver_Outlook_for_11_27_2012_body_1127.jpg, Guest Commentary: Gold & Silver Daily Outlook 11.27.2012

U.S Core Durable Goods: This report may indirectly indicate the shifts in U.S. demand for commodities. As of September, new orders of manufactured durable goods declined by $19.6 billion to $218.2 billion; if this report will show a rise in new orders then it could pull up not only the US dollar but also bullion prices;

U.S Consumer Confidence: according to the previous monthly report, the consumer confidence index rose again in October (M-o-M). The current expectations are that the November index may change direction and slide down.

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

By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG

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27 November 2012 12:59 GMT