Gold and Silver Prices Outlook for December 2011

Gold and silver prices didn’t do much during November after they had sharply increased during October. Gold price ended the month slightly rising while silver moderately declining. What were the main factors that may have affected the development of gold and silver prices in November? Part of it might have to do with the high anxiety in the financial markets revolving the economic progress of the U.S. and the European debt crisis. So what is next for gold and silver in December 2011? Let’s examine the metals market for November and provide an estimate for gold and silver for December 2011. 

Gold and Silver Prices November 2011

Gold and silver prices started the month with moderate rises and as the month of November progressed their prices shifted to falls.Gold price ended November with a 1.5% increase while silver price declined by 4.5%. The table below divides the month into two parts with the breaking point at November 11th; during the first part of November, gold price rose by 3.6%, while silver price slightly increased by 1.0%. But during the second part of November, silver price declined by 5.4%, and gold price by 2.1%.

Gold price outlook and Silver prices FORECAST  us dollar euro percent change October December 2011

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During the first part of November, the U.S dollar slightly appreciated against the Euro, Australian dollar and Canadian dollar, in which the first two currencies are usually strongly correlated with gold and silver prices; during the second part of November, the US dollar appreciated by a higher rate against the Euro and moderately depreciated against the Australian dollar; this shift might partly explain the sharper fall of gold and silver prices during the second part of the month.

The chart below presents the changes in gold and silver prices during November, in which the prices were normalized to 100 on October 31st 2011.

Gold prices forecast & silver price outlook 2011 November December 1

The next chart shows the development of the ratio of gold price to silver price (gold price/silver price) during November; the ratio had an upward trend during most of the month. The ratio rose as silver price underperformed gold price. In the last week of November the ratio stabilized around the 53-54 mark.

Gold and Silver prices ratio 2011 December



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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.