Gold and silver prices declined again yesterday for the second straight day following the ongoing development from Europe that produce news on an hourly basis. Currently gold and silver prices are traded with moderate change. Today, China’s new loans report will be published along with China’s M2 report, Great Britain PPI and UoM U.S. consumer confidence report will become available.
Here is a market outlook of precious metals prices for today, November 11th:
Gold and Silver Prices – November Update
Gold price sharply declined on Thursday by 1.79% to $1,759.6; silver price also declined by 0.74% to $34.11. The chart below presents the development of gold and silver prices during November (normalized gold and silver prices (October 31st 2011=100)). During the month, gold price increased by 2.0% while silver price slightly declined by 0.7%.
The ratio between gold and silver prices slightly slipped on Thursday, November 10th to 51.59. During November, gold price rose by a higher rate than silver price so that the ratio inclined by 2.7%.
The European Debt Crisis Update November 11th
The recent news for Italy was that European Central Bank started to purchase Italian bonds. This news stabilized the markets yesterday as the Euro moderately inclined against the USD and Italy’s 10 year bond yields slightly declined.
Currently, Italian government 10 year bonds yields started to fall following the news of ECB’s plan and reached yesterday 7.25 – a weekly increase of 1.22 percent points. From the beginning of the month the Italian government 10 year bonds yields inclined by 1.73 percent points.
Italy’s senate is set to vote today, November 11th on a package of debt-reduction measures to clear the way for forming a new government. This move may further help stabilize the European financial markets.
The news regarding Italy and Greece may continue affecting forex and commodities traders and consequently influence gold and silver prices.
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate bounced back and slightly rose on Thursday by 0.47% to reach 1.3606. The news from Europe will probably continue affecting the stability of the forex exchange rate markets and consequently may also affect gold and silver prices.
S&P500 / Gold & Silver Prices – November
The S&P500 index slightly inclined on Thursday by 0.86% to reach 1,239.70, and during November the S&P500 index slipped by 1.09%. During the months, the correlations among the S&P500 index and gold and silver prices were strong and positive (as seen in the chart below), which is consistent with the positive relation of gold and silver prices with the 10 year notes’ yields: these findings might suggest that precious metals are less associated with safe haven instruments such as U.S. treasuries as they did in the past. If the stock markets will continue to decline, this may also pressure gold and silver prices to drop.
U.S. Treasuries / Gold & Silver Prices – November
The U.S. 10-year Treasury yield inclined on Thursday by 0.04 percent points to 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 its descent, it may pressure gold and silver prices to fall.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded with mixed trend in the European markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,764.9 per t oz. a $5.3 or 0.30% increase as of 09:52*.
Current silver price per ounce short term future (December 2011 delivery) is at $33.855 per t oz – a $0.251 or 0.74% decline as of 09:52*.
The current ratio of gold to silver prices per ounce is at 52.13.
Gold and Silver Prices Outlook:
Gold and silver prices declined for two consecutive days including a sharp fall for gold price yesterday. The forex market made correction as the Euro, AUD and CHF bounced back against the USD following the news from Greece and Italy; this correction didn’t reach gold and silver prices but might take place today if the Euro and AUD will continue to rise. The reports in Bloomberg of hedge funds being bullish on gold may help rally gold price today and correct for its recent decline. Silver price will probably soon follow gold price and incline as well.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
07:00 New Loans in China
07:00 Money Base (M2) for China
09:30 Great Britain PPI input
14:55 Preliminary UoM U.S. Consumer Confidence Report
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.