Guest Commentary: Gold & Silver Daily Outlook 12.23.2011
Gold and silver slightly declined yesterday for the second consecutive day, even though other commodities such as oil inclined and American stock markets moderately rose on Thursday. Today, the U.S. new home sales report will be published, the U.S. core durable goods and Canadian GDP by Industry report.
Gold slightly declined on Thursday by 0.19% to $1,610.6; silver also declined by 0.69% to $29.05. The chart below shows the development of gold and silver during December.
The ratio between gold and silver slightly rose on Thursday, December 22nd and reached 55.45. During the month the ratio gained 3.9% as gold has outperformed silver.
U.S. Initial Claims Declined Last Week
According to the recent U.S. jobless claims weekly report, initial claims of 4,000 for the week ending on December 17th; to reach 364,000 claims (seasonally adjusted data); the insured unemployment rate also declined by 0.1 percent point to 2.8% for the week ending on December 10th.
U.S GDP Q3 2011 was revised Down to 1.8%
The growth rate of the real U.S GDP 2011 in the third quarter of 2011 was revised down again from 2.0% in the initial estimate to 1.8% growth rate in the recent estimate; in the previous quarter (Q2 2011) the real U.S GDP rose by only 1.3%; thus the growth rate in the Q3 2011 was moderately higher than in the previous quarter and was also the best performing quarter so far in 2011. This may have been among the factor to adversely affect gold and silver to slip yesterday.
On Today's Agenda
U.S Core Durable Goods: This monthly report will examine the changes in U.S. orders of durable goods in the manufacturing sector during November. During October 2011, manufactured durable goods decreased by $1.4 billion to $197.7 billion; Non-defense new orders for capital goods also dropped by $3.5 billion or 4.6% to $71.6 billion (for the full report);
U.S. New Home Sales: This report will present the development in the real estate market during November 2011 and change in the U.S new home sales; in the previous report (October 2011), the sales of new homes reached an annual rate of 307,000 – a 1.3% increase; if this upward trend will progress, it may further indicate a moderate increase in the U.S real estate market and may positively affect commodities.
Forex / Gold & Silver– December Update
The Euro/USD changed direction again and slightly rose on Thursday by 0.03% to reach 1.3051. On the other hand, other forex exchange rates such as the Canadian dollar also appreciated against the USD. If major currencies will depreciate against the USD, it may also affect gold and silver to bounce back.
Gold and Silver Outlook:
Gold and silver moderately declined for the second straight day, and thus continued the downward trend they have had during December. The rally in other commodities mainly oil and natural gas, Forex markets (such as Euro) and American Stock indexes (including S&P500) didn't coincide with yesterday's falls of precious metals. If the upcoming American reports including the U.S. home sales and core durable goods will show further improvement, this may change the direction of the recent downward trend of gold and silver.
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By: Lior Cohen, Energy Analyst forTrading NRG
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.