Gold and silver prices continued to rally and moderately inclined yesterday. The news from Greece and Italy continues to pour in but doesn’t seem to have much of an effect on the commodities and forex markets (for the time being). Currently gold and silver prices are traded down. Today, Australia employment report will be published, and Chairman of the Fed Ben Bernanke Speaks.
Here is a market outlook of precious metals prices for today, November 9th:
Gold and Silver Prices – November Update
Gold price moderately rose on Tuesday by 0.45% to $1,799.2 – the highest price level since September 21st; silver price also inclined by 0.93% to $35.15. 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 4.3% and silver price rose by 2.3%.
The ratio between gold and silver prices slightly slipped again on Tuesday, November 8th to 51.18. During November, gold price rose by a higher rate than silver price so that the ratio inclined by 1.9%. The chart below shows the developed of this ratio during November.
The European Debt Crisis Update November 9th
The Prime Minister of Greece George Papandreou talks on creating an interim government that will be a national unity government in order to avert an economic collapse of the Greece. The new interim government will be announced today and will try to reach and agreement with EU leaders in passing the EU plan for resolving the Greek debt.
In the mean time, the Greek government bonds yields grew to 27.75 – a weekly increase of 4.51 percent points.
The Greek debt concerns could affect the commodities trading including gold and silver trading.
Following the key confidence vote that was held yesterday in Italy, Berlusconi offered to resign from office. This announced was made in light of nation wide uprising against Berlusconi’s government. Yesterday, the Italian government bonds yields grew to 6.59 – a weekly increase of 0.57 percent points. From the beginning of the month the Italian government bonds yields inclined by 1.07 percent points. The recent turn of events might raise the anxiety level in the financial markets that might also affect gold and silver prices to decline via the forex effect (see below).
On Today’s Agenda:
Chairman of the Fed –Bernanke Speaks: Following last week’s FOMC meeting, the Chairman of the Federal Reserve will give a welcome in Federal Reserve Conference on Small Business and Entrepreneurship during an Economic Recovery, in Washington DC;
Australia Unemployment Rate: in the recent report regarding September 2011 the rate of unemployment slightly declined to 5.2%; the number of employed rose by 20,400 people; the number of unemployed slightly fell by 3,800 during September compared with August’s figures. If this trend ill continue to could further affect the AUD;
Forex Exchange Rates / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate slightly rose on Tuesday by 0.42% to reach 1.384. The incoming news from Europe regarding Greece and Italy may continue affecting the Euro and consequently may affect commodities prices.
U.S. Treasuries / Gold & Silver Prices – November
The U.S. 10-year Treasury yield moderately inclined on Tuesday by 0.06 percent points to 2.1%; during November the 10 year treasury yield dropped by 0.07 percent point. In recent weeks 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 continue to drop, this might indicate a risk aversion sentiment in the financial markets that could curb the demand for gold and silver.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded down in the European markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,785.7 per t oz. a $13.5 or 0.75% decrease as of 09:06*.
Current silver price per ounce short term future (December 2011 delivery) is at $34.800 per t oz – a $0.353 or 1.00% decline as of 09:06*.
The current ratio of gold to silver prices per ounce is at 51.31.
Gold and Silver Prices Outlook:
The rally in gold and silver prices in recent days was probably stem, in part, from the continuous speculation around the Greek debt crisis that helps keeping the uncertainty in the financial markets; on the other hand this situation also helped appreciate the US dollar against major currencies. Eventually I speculate that the effects from the forex market will reach the precious metals market and as the US dollar will further appreciate, it could curb the recent rally in gold and silver prices. Furthermore, the news of Hedge funds curbing their bets on major commodities may also catch up as well and start adversary affecting 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):
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
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: