Gold and silver prices ended the last day of 2011 on a positive note and rose after they had declined during most of December. Will the recent rally in precious metals prices continue today, the first business day of 2012? Currently, gold and silver are traded sharply up. Today, Great Britain Manufacturing PMI report will be published, U.S. Manufacturing PMI and the minutes from the recent FOMC meeting.
Here is a market outlook of precious metals prices for today, January 3rd:
Gold and Silver Prices –January/ December Update
Gold price bounced back and rose on Friday by 1.68% to $1,566.8; silver price also followed and increased by 2.2% to reach $27.92. In the chart are gold and silver prices changes throughout December (normalized gold and silver prices to November 30th 2011). During December gold price decreased by 10.5% and silver price by 14.9%.
The ratio between gold and silver prices slightly slipped on Friday, December 30th and reached 56.13. During the month the ratio gained 5.2% as gold price has outperformed silver price.
The chart below shows the ongoing strong relation between gold price and silver price in 2011: it shows that their linear correlation between their daily percent changes continues to be high in December as it was in past months.
On Today’s Agenda
FOMC Meeting Minutes: Following the recent FOMC meeting, in which it was decided to keep the interest rates low and didn’t present a news stimulus plan, the market soon reacted to this news as gold and silver prices sharply declined. The minutes of the FOMC meeting might bring some insight regarding the next steps of the FOMC in 2012 (see here FOMC meeting);
Great Britain Manufacturing PMI: In the recent report regarding November the manufacturing index of GB also declined to 47.6% a 0.2 percent point decrease compared with October’s index; this figure means that the UK manufacturing sectors continued to contract in recent months;
U.S. ISM Manufacturing PMI: This report will present the monthly change in manufacturing sector on a national level for December 2011. During November the index sharply rose to 52.7% a 1.9 percent point increase compared to October’s index; this index might affect forex markets (see here my review of last report);
Forex Trading / Gold & Silver Prices – –January/ December
The Euro to U.S Dollar remained unchanged on Friday at 1.2961, while other forex exchange rates such as the Australian dollar moderately appreciated against the U.S dollar. If major currencies will continue to appreciate against the U.S. dollar, it may also pressure up gold and silver prices.
Current Gold and Silver Prices January 3rd
The major precious metals are currently sharply rising in the U.S. markets:
Current gold price per ounce short term future (February 2012 delivery) is traded at $1,605.40 per t oz. a $38.6 or 2.46% increase as of 19:46*.
Current silver price per ounce short term future (February 2012 delivery) is at $29.650 per t oz – a $1.78 or 6.39% increase as of 19:46*.
(* GMT)
Gold and Silver Prices Outlook
Gold and silver prices didn’t do well in December, but today, on the first business day of 2012 there might be a change in the direction of gold and silver prices. If U.S dollar will continue to depreciate against major currencies such as AUD and Euro, it might help with the recovery of gold and silver prices. The January effect might come into play and rally the stock markets, which, in turn, may also positively affect commodities prices. On the other hand, the upcoming U.S. reports mainly the manufacturing PMI might adversely affect precious metals prices if the report will show economic growth.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
09:30 – Great Britain Manufacturing PMI
15:00 – U.S. ISM Manufacturing PMI
19:15 – FOMC Meeting Minutes
Tomorrow
10:00 – Euro Area Annual Inflation
15:00 – U.S Factory Orders
2:30 – Australian Trade Balance
For further reading:
- Gold and Silver Prices Outlook for January 2012
- Gold and Silver Prices Weekly Outlook for January 2-6
- Weekly Outlook for 2-6 January
- Where are Gold and Silver Headed in 2012?
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