Gold & Silver Prices – Daily Outlook December 27

Gold and silver prices slightly changed during the past several days and may continue their light changes during the last week of 2011. Currently, gold and silver are traded slightly down. Today, the U.S. consumer confidence report will be published.

Here is a market outlook of precious metals prices for today, December 27th:

Gold and Silver Prices –December Update

Gold price slightly slipped on Friday by 0.29% to $1,606.0; silver price on the other hand slightly rose by 0.13% to $29.08. The chart below shows the development of gold and silver prices during December (normalized gold and silver prices to November 30th 2011). During December gold price decreased by 8.2% and silver price by 11.3%.

Gold price forecast & silver price outlook 2011 December 27 The ratio between gold and silver prices slightly declined on Friday, December 23rd and reached 55.22. During the month the ratio gained 3.5% as gold price has outperformed silver price.

Ratio Gold price forecast & silver price outlook 2011 December 27The linear correlation between the daily percent changes of gold price and silver price continues to be strong and robust in December as it was in previous months.

Correlation Gold price outlook & Silver Prices April December 2011 December 27 2011U.S. New Home Sales Slightly Rose in November

According to the recent November report the annual rate of U.S new home sales reached 315,000 (seasonally adjusted); this figure is 1.6 percent above the revised annual rate in October 2011 of 310,000 sales, and it was 9.8% above the annual rate in November 2010.

This news demonstrates the ongoing slow recovery of the U.S. home market, even if the growth rate is very modest.

U.S. Durable and Capital Goods Orders Inclined

According to the recent core durable goods report, during November, new orders of manufactured durable goods increased by 3.8% to $207.0 billion; Non-defense new orders for capital goods rose by 8.1% to $78.7 billion; Inventories of manufactured durable goods inclined last month by 0.6% to $368.8 billion.

This reports showed a slight improvement in the development of U.S. economy. If this trend will continue it may also adversely bullion prices.

On Today’s Agenda

U.S Consumer Confidence: in the previous report, the consumer confidence index rallied in November compared to October. The current expectations are that this index may slightly incline in the December report seeing that the recent news on the U.S. economy was positive and shows signs of recovery; this report could affect commodities prices.

Forex Trading / Gold & Silver Prices – December Update

The Euro to U.S Dollar slightly declined on Friday by 0.05% to reach 1.3044. On the other hand, other forex exchange rates such as the Australian dollar appreciated against the U.S dollar. The chart below shows the development of the correlations between the daily percent changes of AUD and precious metals’ prices percent change. It shows the strong linear relation between these indexes in recent months. Thus, if major currencies will appreciate against the U.S. dollar, it may also affect gold and silver prices to rally.

Correlation Gold & Silver Prices and AUD to us dollar Jan December 2011 outlook 2012Current Gold and Silver Prices December 27th

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

Current gold price per ounce short term future (January 2012 delivery) is traded at $1,598.20 per t oz. a $7.8 or 0.49% decrease as of 07:24*.

Current silver price per ounce short term future (January 2012 delivery) is at $28.915 per t oz – a $0.169 or 0.58% decrease as of 07:22*.

(* GMT)

Gold and Silver Prices Outlook:

Gold and silver prices slipped during the second part of last week, and thus continued the downward trend they have had during most of the month. The rally in crude oil prices, Forex markets (such as Euro and AUD) and American Stock indexes (such as S&P500) didn’t coincide with the recent downward trend of precious metals prices. This short and last week of the year will probably be defined by light trading and moderate price changes. If the upcoming American Consumer confidence report will show an improvement, this may continue to trade down gold and silver prices. On the other hand if US dollar will depreciate against the Euro and Australian dollar this may positively affect gold and silver prices and curb their recent declines.      

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


15:00 – U.S Consumer Confidence


10:30 – KOF Economic Barometer

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About the Author: Lior Cohen, M.A in Economics, a commodities analyst and blogger at Trading NRG.