Gold and silver prices bounced back and sharply rose yesterday. The talks of forming a Greek national unity government may ease some of the speculation around the stability of Greece (at least for now). Currently gold and silver prices are traded with moderate changes. Today, Chinese CPI report will be published, Canadian Housing Starts and Great Britain Manufacturing Production report.
Here is a market outlook of precious metals prices for today, November 8th:
Gold and Silver Prices – November Update
Gold price sharply rose on Monday by 1.99% to $1,791.1 – the highest price level since September 21st; silver price also increased by 1.20% to $34.83. The chart below shows the development of gold and silver prices since October 20th (normalized gold and silver prices (October 20th 2011=100)). During November gold price increased by 3.8% and silver price rose by 1.4%.
The ratio between gold and silver prices slightly slipped on Monday, November 7th to 51.43. During November, gold price rose by a higher rate than silver price so that the ratio inclined by 2.4%. The chart below shows the developed of this ratio since October.
The European Debt Crisis Update
The Prime Minister of Greece George Papandreou and Antonis Samaras, leader of the opposition, will decide on the new prime Minster that will replace Papandreou as acting Prime Minister in the new national unity government that will need to pass the EU plan for resolving the Greek debt. In the mean time, the Greek government bonds yields grew to 26.77 – a weekly increase of 3.53 percent points.
The Greek debt concerns could affect the commodities trading including gold and silver trading.
Italy will have a key confidence vote today on Berlusconi’s government; if the vote won’t go in Berlusconi favor it could decide his future in as Italy’s Prime Minster.
On Today’s Agenda:
Chinese CPI: in September, the Chinese inflation rate slightly slipped compared with August’s CPI and reached an annual rate of 6.1% (it was 6.2% in August);
Great Britain Manufacturing Production : this report will show the month to month change in the British manufacturing production in September; in the last report regarding August the seasonally adjusted manufacturing index fell by 0.3% (M-2-M), while the overall production rose by 0.2%; this news may influence commodities traders;
Canadian Housing Starts: The upcoming report is regarding October 2011. In previous report, the seasonally adjusted housing starts reached 205,900 units, which is higher than the 191,900 units started during August 2011. This report may affect strengthen the Canadian dollar.
Forex Exchange Rates / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate slightly fell on Monday by 0.12% to reach 1.376. The incoming news from Greece may continue affecting the Euro and consequently may affect commodities prices.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded slightly changes in the European markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,790.8 per t oz. a $0.3 or 0.02% decrease as of 08:22*.
Current silver price per ounce short term future (December 2011 delivery) is at $34.845 per t oz – a $0.017 or 0.05% incline as of 08:21*.
The current ratio of gold to silver prices per ounce is at 51.39.
Gold and Silver Prices Outlook:
The recent rise in gold and silver prices during yesterday, doesn’t necessarily means a start of a sharp upward trend, it might be just a correction for the modest drop precious metals prices experienced on Friday. The speculation around the Greek debt crisis may keep contributing uncertainty to the financial markets that might help keeping gold and silver prices high. On the other hand, the recent news of Hedge funds claiming they will curb their bets on major commodities may adversary affect gold and silver prices. Therefore, I speculate the path of gold and silver prices is likely to continue zigzagging throughout the week with a moderate upward trend.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
10:30 – Great Britain Manufacturing Production
13:15 – Canadian Housing Starts
3:00 – Chinese CPI
Tentative –OPEC Monthly Report
14:30 – Chairman of the Federal Ben Bernanke Speaks
15:30 – EIA Report on Crude Oil Stockpiles
2:30 – Australia Rate of Unemployment
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.