Gold and silver prices changed direction and slightly slipped on the first day of the week. There are many news items on the agenda today including Great Britain CPI, Euro Area GDP for the third quarter, U.S. Retail Sales, U.S. Producer Price Index and Bank of Japan Rate Decision. Currently gold and silver prices are traded slightly up.
Here is a market outlook of precious metals prices for today, November 15th:
Gold and Silver Prices – November Update
Gold price slightly declined on Monday by 0.54% to $1,778.4; silver price also declined by 1.90% to $34.02. The chart below presents the development of gold and silver prices in recent month (normalized gold and silver prices to October 31st 2011). During November, gold price increased by 3.1%, while silver price slightly slipped by 1.0%.
The ratio between gold and silver prices slightly rose on Monday, November 14th to 52.27. During November, gold price rose by a higher rate than silver price so that the ratio rose by 4.1%.
Goldman Lowers Forecast on Commodities Prices
According to Bloomberg, Goldman Sachs reduced its one year projections on major commodities prices; Goldman’s current prediction for silver price is $32.2 within a year and gold price will be $1,930.
In the mean time, Bloomberg also reports that billionaire John Paulson will cut his position in gold by cutting 36% in his holdings in SPDR gold trust.
This news may curb the enthusiasm of precious metals traders and may even influence them to cut some of their holdings.
On Today’s Agenda
Great Britain CPI: this report will present the yearly rate of GB’s consumer price index for October; in the last report regarding September the annual CPI reached 5.2%; this news may influence pound traders;
U.S. Retail Sales: this report will present the changes in the retail sales for October; in September, the retail sales slightly rose by 1.1% (see here my review of the recent report).
Euro Area GDP 3Q2011: This report will show the changes in the economic growth in Euro Area; in Q2 2011, the Euro Area GDP grew by only 0.2% (Q-2-Q). This news might affect the Euro; there are early expectations of a low growth rate in the third quarter (see here recent report);
U.S. Producer Price Index: This monthly report will show the progress in the PPI during October, i.e. the inflation rate from producers’ stand point. In the recent report regarding September, this index for finished goods rose by 0.8%; this news could have an effect on gold and silver prices;
Bank of Japan – Rate Decision: This statement will present Bank of Japan’s rate decision and other monetary related decisions. In the recent statement the bank kept the interest rate unchanged and decided to enhance the Asset purchasing program by 5 trillion yen ($65 billion).
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate changed direction as well and moderately declined on Monday by 0.84% to reach 1.3634. The depreciation of the Euro and other currencies such as AUD and CAD coincides with the decrease in gold and silver prices. The news from Europe will probably continue affecting the forex exchange rate markets and consequently may also determine the path of gold and silver prices.
S&P500 / Gold & Silver Prices – November
The S&P500 index slipped on Monday by 0.96% to reach 1,251.78; during November the S&P500 index slightly fell by 0.12%. During November, the correlations among the S&P500 index and gold and silver prices were strong and positive; this finding might indicate that the direction of the stock market is linked to the trend of gold and silver prices.
U.S. Treasuries / Gold & Silver Prices – November
The U.S. 10-year Treasury yield remained unchanged on Monday at 2.04%; during November the 10 year treasury yield dropped by 0.13 percent point. During November there were positive correlations among the U.S. 10 year notes yields and gold and silver prices. If the long term U.S. treasury yields will resume their descent, it may pressure gold and silver prices to decline.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded up in the U.S. markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,783.1 per t oz. a $4.7 or 0.26% increase as of 21:12*.
Current silver price per ounce short term future (December 2011 delivery) is at $34.55 per t oz – a $0.526 or 1.55% incline as of 21:13*.
The current ratio of gold to silver prices per ounce is at 51.60.
Gold and Silver Prices Outlook:
Gold and silver prices changed direction again and moderately decline on Monday, after they had inclined on Friday. The speculation around the stability of Europe may have affected traders and will probably keep affecting the financial markets including precious metals market. The recent news of Goldman Sachs lowering its forecast on commodities prices, and the announcement that John Paulson is cutting his position in gold may influence traders to reduce their gold and silver position and consequently may trade down gold and silver prices throughout the day.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
09:30 – Great Britain CPI
10:00– Euro Area GDP 3Q2011 Report
13:30 – Changes in U.S. Retail Sales
13:30 – U.S. Producer Price Index
Bank of Japan – Rate Decision and Monetary Policy Statement
10:00 – Euro Area CPI
13:30 –U.S CPI
14:00 – U.S. TIC Long Term Purchases
15:30 – EIA Report on Crude Oil Stockpiles
For further reading:
Monthly Analysis and Outlook:
- Gold and Silver Prices Monthly Outlook for November 2011
- Natural Gas Prices Monthly Outlook for November 2011
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.