Gold and silver prices continued their rally on Friday and thus completed a two day recovery after both metals had declined during most of the month so far. On today’s agenda: FOMC Member Lockhart Speaks. Currently precious metals prices are declining.
The current headlines are:
Following the recent G8 Meeting from the weekend, there will be another summit of German and French officials to discuss the current EU debt crisis. This meeting will be held in Berlin in preparation for the upcoming EU Summit on May 23rd.
These headlines might affect the forex markets and in turn commodities markets.
There are speculations that BOJ will expand its stimulus plan. This may affect ht Yen.
Here is a short forecast for gold and silver prices for Monday, May 21st:
Precious Metals – May Update
Gold price rose again on Friday by 1.08% to $1,591.9; silver also increased by 2.48% to $28.72. During the month gold declined by 4.34% and silver by 7.42%.
The chart below shows the normalized prices of metals during month so far (both metals rates are normalized to 100 as of April 30th).
The ratio between two precious metals decreased again on Friday to 55.44. During the month the ratio rose by 3.32% as silver has moderately under-performed gold during the month. In the chart below are the shifts of this ratio during May.
Despite the sharp shifts in the bullion rates in recent days, during May the volatility of gold and silver prices hasn’t changed by much from their previous months as their standard deviations during the month are very similar to the standard deviations in previous months.
On Today’s Agenda
FOMC Member Lockhart Speaks: Following the recent FOMC meeting, the FOMC member Lockhart will give a speech. If he will hint offer some insight about the future steps of the FOMC it might affect the financial markets;
Forex / Gold & Silver Market – May Update
The Euro/U.S Dollar changed direction and rose on Friday by 0.66% to 1.2782. During the month (UTD) the Euro/U.S Dollar fell by 3.45%; alternatively, the Aussie dollar and Canadian dollar depreciated on Friday by 0.43% and 0.25%, respectively. Since these currencies pairs are still correlated with precious metals prices, if the U.S dollar will appreciate, bullion prices may renew their downward trend. Currently the Euro is declining against the USD.
Current Gold and Silver Prices as of May 21st
Gold (June 2012 delivery) is traded at $1,590.4 per t oz. a $1.5 or 0.09% decrease as of 10:31*.
Silver (June 2012 delivery) is at $28.415 per t oz – a $0.3 or 1.04% decrease as of 10:31*.
Daily Outlook for May 21st
Gold and silver prices changed direction and rose for the past couple of business days. This shift in market sentiment may have some lingering effects on today’s trading especially since there aren’t many news items on today’s agenda. If the U.S dollar will resume its upward trend against major currencies including the Euro and AUD then precious metals prices may renew their downward trend.
Here is a reminder of the top events and reports that are planned for today and tomorrow (all times GMT):
10:15 – FOMC Member Lockhart Speaks
09:30 – Great Britain CPI
09:30 – Great Britain Net borrowing
11:15 – FOMC Member Lockhart Speaks
15:00 – U.S. Existing Home Sales
00:50 – Japanese Trade balance
Tentative – Bank of Japan – Rate Decision
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