Gold and Silver Forecast for July

The gold and silver markets have made their biggest comeback since February of this year. Their rally may have stemmed by the escalations in Iraq and the latest FOMC meeting. But this rally didn’t lead to a sharp rise in the demand for gold and silver ETFs as the amount of gold and silver in the leading ETFs GLD and iShare Silver nearly didn’t change too much, respectively. The FOMC meeting ended with another tapering of QE3 by $10 billion. But Yellen’s press conference slightly shut the door for any talk about a raise hike anytime soon. Even her recent speech at IMF had a dovish tone. Looking forward, the upcoming minutes of the last FOMC meeting and the next meeting at the end of the month could offer some additional insight regarding the future plans of the Fed and perhaps influence bullion investors. Let’s review the latest developments in the precious metals market and see what is next for gold and silver.  

Gold and Silver Prices June 2014

Gold and silver prices rallied during most of June. Their recovery coincided with the rise in the stock market and the depreciation of the US dollar against the Japanese yen, Canadian dollar, and Aussie dollar. By the end of June, the price of gold rose by 3.87%; the price of silver, by 2.43%.

Let’s divide June into two parts before and after the FOMC meeting on June 17-18 as presented in the table below, which divides the month at June 18th; during the first part of June, gold slightly rose by 2.1%; silver increased by 5.9%. During the second part of June gold increased at a faster pace of 3.9%; silver price rallied by 6.3%.

Gold and Silver dollar euro percent change  June 2014

But the main change was with the movement with the Euro/USD: During the first part of June, the U.S dollar appreciated against the Euro; in the second part, however, the US dollar depreciated against the Euro. These currencies pairs, however, didn’t have a strong relation with the changes in bullion prices.

The chart below presents the changes of gold and silver during June, in which the rates are normalized to 100 on May 30th 2014.

Gold and silver forecast June 2014

The ratio of gold to silver (gold price/silver price) fell during most of June. The ratio decreased as silver price has out-performed gold price. During the month the ratio ranged between 66 and 62.

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