Gold and silver prices changed direction and the concerns of the European debt crisis including the news from Italy and Greece (see below) may have caused the sharp fall for the Euro that may have also affected gold and silver prices to decline. Currently gold and silver prices are traded sharply down. Today, there are many items on the agenda including: the U.S. Federal Budget Balance report, the American and Canadian trade balance reports, the U.S. Unemployment Claims, the GB rate decision and Ben Bernanke will speak.
Here is a market outlook of precious metals prices for today, November 10th:
Gold and Silver Prices – November Update
Gold price moderately declined on Wednesday by 0.42% to $1,791.6; silver price also declined by 2.25% to $34.36. The chart below shows the development of gold and silver prices during the month (normalized gold and silver prices (October 31st 2011=100)). During November, gold price increased by 3.8% while silver price remained virtually unchanged.
The ratio between gold and silver prices slightly rose on Wednesday, November 9th to 52.14. During November, gold price rose by a higher rate than silver price so that the ratio inclined by 3.8%.
The European Debt Crisis Update November 10th
The recent news from Italy is that Silvio Berlusconi will step down from his position as Italy’s Prime Minster by Saturday. The debt crisis in Italy was probably the prime reason for the sharp falls yesterday in the European stock markets and the sharp depreciation of the Euro.
The Italian government bonds yields sharply inclined to 7.45 – a weekly increase of 1.43 percent points. From the beginning of the month the Italian government bonds yields inclined by 1.93 percent points.
The Greek government bonds yields continue to remain high at 27.73% – a weekly increase of 4.49 percent points.
The concerns revolving Italy and Greece may keep forex and commodities traders edgy and thus this situation could consequently influence gold and silver prices as well.
On Today’s Agenda:
GB Bank Rate: The Bank of England will announce its official bank rate. The current rate is still at 0.5%; this decision may affect forex trading and consequently commodities trading as well;
U.S. Unemployment Claims: initial claims declined by 9,000 to 397,000 claims for the week ending on October 29th; the upcoming report may affect forex and commodities traders;
American Trade Balance: This monthly report for September 2011 will show the changes in imports and exports of goods and services to and from the U.S, including major commodities;
Fed Chairman Bernanke Speaks: The Chairman of the Federal Reserve will give a speech in El Paso;
U.S. Federal Budget Balance: this upcoming publication will show the changes in the U.S federal balance for October 2011; this report indicates the government debt growth and thus may affect the U.S dollar. In the October report regarding September the deficit rose by $64.5 billion (See here a summary of the recent report).
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate changed direction and sharply fell on Wednesday by 2.11% to reach 1.3542. The news from Italy and Greece seems to continue raising the uncertainty levels and thus may have affected the Euro and could consequently also pressure gold and silver prices to trade down as the USD will appreciate.
U.S. Treasuries / Gold & Silver Prices – November
The U.S. 10-year Treasury yield sharply declined on Wednesday by 0.10 percent points to 2.0%; during November the 10 year treasury yield dropped by 0.17 percent point. During November there were strong positive correlations among the U.S. 10 year notes yields and gold and silver prices. If the long term U.S. treasury yields will keep on declining, this may indicate a shift in the financial market sentiment that could pressure gold and silver prices to decline.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded sharply down in the European markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,762.3 per t oz. a $29.3 or 1.64% decrease as of 08:26*.
Current silver price per ounce short term future (December 2011 delivery) is at $33.755 per t oz – a $0.606 or 1.76% decline as of 08:26*.
The current ratio of gold to silver prices per ounce is at 52.19.
Gold and Silver Prices Outlook:
Gold and silver prices moderately declined yesterday and thus halted the recent rally gold price experienced in recent days. The effect of the changes in the forex markets mainly in Euro, AUD and CAD against the USD due to the speculation revolving the news from Greece and Italy may have also affected gold and silver prices to decline (via the exchange rate effect). If the reports that will be published today regarding the U.S economy will be positive, they may curb some of the falls in the Euro and AUD and in turn may curb the decline in gold and silver prices throughout the day. I speculate that gold and silver prices are likely to continue zigzagging throughout the week.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Tentative –IEA monthly oil report
9.00 – ECB Monthly Bulletin
12:00 –GB Bank Rate
13:30 – Department of Labor Report – U.S. Unemployment Claims
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
15:30 – EIA report on U.S. Natural Gas Market
16:45 – Fed Chairman Bernanke Speaks
19:00 –U.S. Federal Budget Balance
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.