Bullion edged down again for the second consecutive day. The recent testimony of Bernanke didn't offer any hints of the future steps of the FOMC. Bernanke voiced his concerns for the slow decline in rate of unemployment and slow progress in the housing market. He remained vague as to the actions the FOMC would consider to jump-start the U.S economy. The inflation report came out yesterday: the core CPI edged up again by 0.2% during June. If this vote will pass it may ease some of the uncertainty around the Spanish banks debt crisis. On today's agenda: Minutes of MPC Meeting, U.S. Housing Starts & building permits, Bank of Canada's Monetary Policy, and Bernanke's Testimony in the House of Representatives.
Gold price declined again on Tuesday by 0.13% to $1,589.5; Silver also slipped by 0.02% to $27.32. During July, gold declined by 0.92% and silver by 1.07%.
The ratio between the two precious metals edged down on Tuesday to 58.19. During July the ratio rose by 0.16% as gold slightly out-performed silver.

On Today's Agenda
U.S. Housing Starts: this report was historically negatively linked with gold– as housing starts decreased, gold tended to rise the following day; in the previous report, the adjusted annual rate reached 708,000 in May 2012, which was 4.8% below April's rate;
Bernanke's Testimony: This will be a testimony of the same title as a day earlier, before Committee on Financial Services in the U.S. House of Representatives;
Currencies / Bullion – July Update
The Euro/USD rose again on Tuesday by 0.19% to 1.2294. Further, other exchange rates such as the Australian dollar also appreciated on Tuesday against the USD by 0.65%. Despite the different directions these currencies and bullion have taken there are still strong relations among them. The linear correlation between gold and Euro/USD is 0.70 (daily percent changes, for the last few weeks).
Daily Outlook
As expected, Bernanke didn't offer any hints of the Fed's plans to stimulate the U.S economy. The U.S housing reports will come out today and may affect U.S stocks, forex and commodities markets. BOC monetary policy report might affect the Canadian dollar which tends to be strongly linked with bullion rates. Finally, if the major exchange rates including Euro and CAD will change direction and depreciate against the USD, this could adversely affect bullion.
For further reading: Gold & Silver | Weekly Outlook July 16-20
By: Lior Cohen, M.A. in Economics, Commodities Analyst and Blogger at Trading NRG
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