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Guest Commentary: Gold & Silver Daily Outlook 05.29.2012

Guest Commentary: Gold & Silver Daily Outlook 05.29.2012

Lior Cohen, Energy Analyst for Trading NRG,

Gold and silver increased again on Friday, and also edged up during yesterday's trading in Asia. Will this positive trend continue in today's trading? On today's agenda: U.S consumer confidence report and Australia's retail sales report.

Gold increased again on Friday by 0.28% to $1,571.2; silver also increased by 0.81% to $28.39. During the month gold declined by 5.59% and silver by 8.48%.

American Stock Markets / Bullion– May

The S&P500 edged down on Friday by 0.22% to 1,317.82. Despite the drop in both gold and S&P500 index in similar rates during the month so far their linear correlation negative and weak as indicated in the chart below. During May the linear correlation was -0.214 with gold and -0.279 with silver after the correlation used to be strong and positive. This shift could suggest the recent drop in bullion is less related (than one could consider) with the decline in the U.S stock markets.

Guest_Commentary_Gold_Silver_Daily_Outlook_05.29.2012_body_Correlation_2012.png, Guest Commentary: Gold & Silver Daily Outlook 05.29.2012

On Today's Agenda

U.S Consumer Confidence: according to the previous report, the consumer confidence index remained flat during April. The current expectations are that the April index may decline; this report might affect commodities rates;

Australian Retail Sales: This monthly report will pertain to the developments in Australia's retail sales report for April 2012. The retail sales (seasonally adjusted) rose by 0.9% in March; this news may affect the strength of the Aussie dollar, which is strongly linked with bullion rates;

Currencies / Bullion Market – May Update

The Euro/USD changed direction and traded up on Monday by 0.2% to 1.2542. Furthermore, "risk currencies" such as the Australian dollar also appreciated during Monday against the USD. If the U.S dollar will continue to trade down against the Euro, bullion might also rally.

Daily Outlook

Precious metals rose again during Friday and most of Monday's trading (even though it was recorded for the trading in CME). If the Euro will change direction and start to pick up, this could also help pull up bullion rates. The recent momentum in which both metals have increased might continue especially since there aren't too many news items on the today's agenda to influence bullion traders. The upcoming US report about consumer confidence might affect forex and commodities.

This gold and silver prices outlook was first presents in Trading NRG

For further reading:

How will a Greek Exit Affect Gold and Silver?

Gold and Silver Weekly Outlook for May 28- June 1

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.