Gold and silver prices continued to seek direction in the past few days as is the case for other commodities and forex markets. Today, European Central Bank will decide on its interest rates (update: ECB reduced the interest rate again by 0.25 percent points to 1%), the U.S. Department of Labor will present the weekly change in unemployment claims and China’s inflation rate will be published. Currently gold and silver are traded sharply down.
Here is a market outlook of precious metals prices for today, December 8th:
Gold and Silver Prices –December Update
Gold price rose on Wednesday by 0.75% to $1,744.8; silver price on the other hand slightly declined by 0.36% to $32.63. The chart below shows the development of gold and silver prices in the past couple of week (normalized gold and silver prices to November 25th 2011). During December gold price slightly declined by 0.3% and silver price by 0.5%.
The ratio between gold and silver prices slightly inclined on Wednesday, December 7th to 53.48. During the month the ratio slightly rose by 0.2% as gold price slightly outperformed silver price.
On Today’s Agenda
ECB Press Conference and Euro Interest Rate Decision: In the previous ECB rate decision the interest rate was cut by 0.25 percent point to 1.25%. The Euro Area didn’t grow much and might enter into a deeper economic slowdown. ECB might want to fight this slowdown and ease the liquidity problems of EU banks by reducing the rates today by another 0.25%;
U.S. Unemployment Claims: initial claims inclined by 6,000 to 402,000 claims for the week ending on November 26th; the number of insured unemployment inclined by 35k to 3.740 million during the week of November 19th;
Chinese Inflation: in October, the Chinese inflation rate declined compared with September’s CPI and reached an annual rate of 5.5% (it was 6.1% in September); this rate is still above the China’s inflation target of 4% in annual terms. But the sharp drop in the inflation rate is probably an indication of the effect of the steps taken by the People Bank of China’s to curb the inflation pressures;
Forex Trading / Gold & Silver Prices – December Update
The Euro to U.S Dollar exchange rate slightly increased again yesterday by 0.07% to 1.3411. Other forex currencies such as the Australian dollar and Canadian dollar also appreciated against the US dollar; this rally is probably among the reasons for the gains recorded yesterday to gold price. If the Euro and AUD will change direction today and decline it may drag down gold and silver prices throughout the day.
Current Gold and Silver Prices December 8th
The major precious metals are currently traded down in the American markets:
Current gold price per ounce short term future (January 2012 delivery) is traded at $1,714.80 per t oz. a $30 or 1.72% decrease as of 16:00*.
Current silver price per ounce short term future (January 2012 delivery) is at $31.645 per t oz – a $0.982 or 3.01% decline as of 16:01*.
Gold and Silver Prices Outlook:
Gold and silver prices continue to zigzag on a daily basis even though in the past couple of weeks both precious metals have shown an upward trend. The upcoming ECB interest rate decision and tomorrow’s EU summit in Brussels will probably affect the forex markets and consequently also affect gold and silver prices. If the ECB will further cut down the interest rates it might weaken the Euro against the USD , and consequently might also pressure down gold and silver prices. Some also predict that reducing the rate will pressure gold price to decline. Furthermore, the ECB president didn’t signal in the recent ECB press conference that he plans to purchase more bonds – this speculation may have also helped drive down the Euro and consequently also commodities prices.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
13:30 – Department of Labor Report – U.S. Unemployment Claims
13:30 – ECB Press Conference and Euro Rate Decision
15:30 – EIA U.S. Natural Gas Report
3:00 – Chinese CPI
All day – EU Summit
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
For further reading:
- Gold and Silver Prices Weekly Outlook December 5-9
- Weekly Outlook for 5-9 December
- Gold and Silver Prices Monthly Outlook for December 2011
About the Author: Lior Cohen, M.A in Economics, a commodities analyst and blogger at Trading NRG.