Gold & Silver Prices – Daily Outlook December 22

Gold and silver prices changed direction and moderately declined yesterday, even though other commodities prices such as crude oil prices rose on Wednesday. Currently, gold and silver prices are slightly rising. Today, the U.S. final Q3 GDP will be published, GB’s GDP of third quarter and U.S. Unemployment Claims.

Here is a market outlook of precious metals prices for today, December 22nd:

Gold and Silver Prices –December Update

Gold price slightly slipped on Wednesday by 0.25% to $1,613.6; silver price also declined by 0.97% to $29.25. The chart below shows the downward trend of gold and silver prices during most of December (normalized gold and silver prices to November 30th 2011). During December gold price decreased by 7.8% and silver price by 10.8%.

Gold price forecast & silver price outlook 2011 December 22The ratio between gold and silver prices slightly declined on Wednesday, December 21st and reached 55.17. During the month the ratio gained 3.4% as gold price has outperformed silver price.

Ratio Gold price forecast & silver price outlook 2011 December 22The correlation between gold price and silver price is still high in December as it was in previous months.

Correlation Gold price outlook & Silver Prices April December 2011 December 22 2011

U.S Existing Home Sales Rose in November

The U.S existing homes sales slightly rose in November by 4%; this news coincides with the recent sharp gains in the housing starts, which was announced yesterday.

On Today’s Agenda

Great Britain Updated GDP 3Q 2011: This will be the final projection of the third quarter real GDP of GB. In the previous estimate of the GDP for the 3Q2011 grew by 0.5%; if the final rate will change, it may affect the GBP/USD exchange rate;

Final U.S GDP 3Q 2011 Report: This will also be the final estimate of U.S. GDP growth rate in the third quarter. In the preliminary estimates the 3Q2011 GDP growth rate was 2.0%, compared with 1.3% increase at 2Q2011. This shows a slightly higher growth rate for the US’s GDP even though the recent Q3 growth rate estimate was revised down; another revision may also affect forex and commodities traders (for the second estimate of 3Q GDP).

U.S. Unemployment Claims: initial claims decreased by 19,000 to 366,000 claims for the week ending on December 10th; the number of insured unemployment slightly inclined by 4k to 3.603  million during the week of December 3rd.

Forex Trading / Gold & Silver Prices – December Update

The Euro to U.S Dollar changed direction again and slipped on Wednesday by 0.28% to reach 1.3047. On the other hand, other forex exchange rates such as the Canadian dollar and Australian dollar slightly appreciated against the U.S dollar. If major currencies will appreciate against the U.S. dollar, it may also affect gold and silver prices to bounce back.

U.S. Treasuries / Gold & Silver Prices – December Update

The U.S. 10-year Treasury yield inclined again on Wednesday by 0.04 percent points to 1.98%; during December the 10 year treasury yield dropped by 0.10 percent point. Furthermore, during December there were positive correlations among the daily percent changes of U.S. 10 year notes yield and gold and silver prices (0.245 and 0.503, respectively). If the LT U.S. treasury yield will further rise, it may also continue to pressure up gold and silver prices. The graph below shows the development and strong relation between gold price and U.S 10 year treasury yield during December.  

Chart Gold Price and 10 Yr Daily Treasury Yield December 2011 December 22
Current Gold and Silver Prices December

The major precious metals are currently traded slightly up in the European markets:

Current gold price per ounce short term future (January 2012 delivery) is traded at $1,617.40 per t oz. a $3.8 or 0.24% increase as of 08:35*.

Current silver price per ounce short term future (January 2012 delivery) is at $29.620 per t oz – a $0.371 or 1.27% increase as of 08:34*.

(* GMT)

Gold and Silver Prices Outlook:

Gold and silver prices continue to zigzag and changed direction again as they both moderately declined yesterday. The rally in other commodities prices mainly crude oil prices and Forex markets (such as CAD and AUD) and most American Stock indexes (including S&P500) didn’t coincided with yesterday’s falls of precious metals prices. The upcoming news from Europe and U.S. in regards to the final GDP might stir up the markets if there will be substantial changes; otherwise if the rest of the commodities will continue to trade up, U.S. LT treasuries yields will rise,   and major currencies will also continue to appreciate against the U.S. dollar, gold and silver prices are likely to follow and bounce back. 

Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):


09:30 – Great Britain Updated GDP 3Q 2011

13:30 – Final U.S GDP 2Q 2011 Report

13:30 – Department of Labor Report – U.S. Unemployment Claims

15:30 – EIA U.S. Natural Gas Market Report


13:30 – Canada GDP by Industry

13:30 – U.S Core Durable Goods

15:00 – U.S. New Home Sales

For further reading:

Monthly Analysis and Outlook: