Gold and silver prices continue to seek direction as they have slightly slipped yesterday after they had moderately inclined on Tuesday. There is still no new development in regards to the European debt crisis, but once there will be, it could stir up the financial markets including the precious metals market. Morgan Stanley thinks that gold will thrive in 2012 due to the European debt crisis. Currently gold and silver prices are traded sharply down. Today, the Philly Fed Manufacturing Index will be published, a weekly update on the U.S. Unemployment Claims and the U.S. Housing Starts and building permits.
Here is a market outlook of precious metals prices for today, November 17th:
Gold and Silver Prices – November Update
Gold price slightly slipped on Wednesday by 0.44% to $1,774.3; silver price also declined by 1.84% to $33.82. In the chart below are the changes in gold and silver prices during the month (normalized gold and silver prices to October 31st 2011). During November, gold price inclined by 2.8%, while silver price declined by 1.5%.
The ratio between gold and silver prices rose on Wednesday, November 16th to 52.46. During November the ratio rose by 4.5%.
On Today’s Agenda
U.S. Housing Starts and Building Permits: the housing starts news was historically correlated with gold price – as housing starts rose, gold prices tend to fall the following day (even when controlling to the U.S dollar effect); in the recent report, the adjusted annual rate of housing starts reached 658,000 in September, which is 15% above August’s rate of 572,000 (see here the recent review);
U.S. Unemployment Claims: initial claims decreased by 10,000 to 390,000 claims for the week ending on November 4th; the number of insured unemployment fell by 92k to 3.615 million during the week of October 29th; the upcoming report may affect commodities traders;
Philly Fed Manufacturing Index: This survey provides an indicator for the progress of the U.S economy. In the last survey, the index rose from -17.5 in September to +8.7 in October. This index, may affect during the day not only the US Dollar but also gold price (see here last report);
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate declined again on Wednesday by 0.56% to reach 1.3464. During November the correlations among the daily percent changes of gold price, silver price and major exchange rates were strong as seen in the chart below; the strongest correlation (so far) were Australian dollar with silver price and gold price with Hong Kong dollar.
S&P500 / Gold & Silver Prices – November
The S&P500 index fell on Wednesday by 1.66% to reach 1,236.91; during November the S&P500 index fell by 1.31%. During November, the correlations among the S&P500 index and gold and silver prices were strong and positive (see chart below); Thus, if the stock market will continue to decline as it did yesterday, it may also indicate that gold and silver prices are likely to slightly fall as well. The news of the Philly Fed and Housing starts may affect the direction of the stock markets and gold and silver prices.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded sharply down in the U.S. markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,719.3 per t oz. a $55 or 3.1% decrease as of 18:31*.
Current silver price per ounce short term future (December 2011 delivery) is at $31.40 per t oz – a $2.422 or 7.16% decline as of 18:30*.
(* GMT)
Gold and Silver Prices Outlook:
Gold and silver prices continue to seek direction as they shift from red to green in the past few days. Currently both metals are traded sharply down, probably due to the modest growth rate of the Philly Fed in the recent survey. Furhtmore, Bloomberg reports that the Fitch negative rating of U.S. banks may have also pushed down stock markets along with the major commodities prices. The European debt crisis didn’t produce a significant development in the past couple of days resulting in a decline in the volatility of the financial markets. But this situation could change very rapidly and affect not only the Euro/USD but also gold and silver prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
13:30 – U.S. Housing Starts
13:30 – U.S. Building Permits
13:30 – Department of Labor Report – U.S. Unemployment Claims
15:00 – Philly Fed Manufacturing Index
15:30 – EIA report on U.S. Natural Gas Market
Tomorrow
13:00 – Canadian Core CPI
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.