Gold & Silver - Daily Outlook July 5

Gold and silver started July with sharp falls, but they are currently traded up. Today, the full US durable good report will be published.

Let’s examine the news of the day related to the precious metals market for today July 5th:

Gold and silver– June/July

 Gold price shifted direction again sharply fell on Friday, July 1st as it declined by 1.34% to $1,482 – its lowest level since May 17th.

Silver also declined on Friday by 3.24% to $33.71.

 The chart below shows the normalized gold and silver (May 31st 2011=100).


As of Friday, July 1st the ratio between gold and silver continued to remain around the 43 mark as it reached 43.99; during June this ratio inclined by 7.5%, which means that during June gold has outperformed silver.   

USD & Gold and silver– July update

 The USD is currently depreciated against the Euro, following the approval of the EU’s approval of the Greek aid over the weekend. If this trend will continue today, this might also affect gold and silver to trade up.  Nonetheless, since the Euro/ USD is traded down very moderately, its effect on gold and silver might be little.

 US Manufacturing Orders

 Today, the US Department of Commerce will issue its full May 2011 report about the Manufacturing Orders; this report is a good signal for the changes in the investment and production in the US; in the advance report of May 2011, the new orders manufacturing goods rose by $3.6 billion or 1.9% to $195.6 billion. If the upcoming report will continue to show an improvement, this might signal the US economy’s recovery from its slowdown.  

This report was suggested to affect the US treasury bonds yields according to Balduzzi, Elton, and Green (2001); if this will be the case, it might also have an indirect effect on gold and silver.

 Gold and silver Outlook:

 Gold and silver started July with sharp falls, but are currently traded up; one of the key factors will remain the USD effect on bullion metals prices’; the recent news from Europe in which the Greek crisis is averted (for now) might be among the reasons for the current depreciation of the US dollar and consequently the rise in gold and silver.

I still speculate that in the short term gold will remain near the $1,500 mark and silver price around the $33-35 mark, but in the following weeks we might continue to see gold and silver losing some of their value.  

 Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):


5:30 – Reserve Bank of Australia – rate decisions

15:00 – U.S. Department of Commerce – US Manufacturing Shipments and Orders

 For further reading: Gold and silver prices outlook for July 2011

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at