Gold and silver prices continue to zigzag with no clear trend as they moderately declined yesterday along with the rest of the markets including crude oil prices, American stock markets and Euro/USD. The Super committee’s failure to cut the U.S. budget didn’t help rally the markets. The revised down U.S. GDP and the decrease in U.S. demand for durable goods may have also adversely affected commodities traders. Currently gold and silver are traded slightly up. Today, the German Business Climate Survey will be published, Great Britain GDP for third quarter, and the U.S. Unemployment Claims report.
Here is a market outlook of precious metals prices for today, November 24th:
Gold and Silver Prices – November Update
Gold price shifted back to red and slightly declined on Wednesday by 0.21% to $1,698.80; silver price also fell by 3.23%to $31.96. The chart below shows the development of gold and silver prices during November (normalized gold and silver prices to October 31st 2011). During the month, gold price declined by 1.5% and silver price fell by 7.0%.
The ratio between gold and silver prices sharply rose on Wednesday, November 23rd to 53.15. During November, gold price decreased by a slightly lower rate than silver price so that the ratio inclined by 5.8%.
On Today’s Agenda
German Business Climate: This survey estimates the changes in the business climate in Germany on a monthly basis. In the recent report regarding October 2011, the business climate index fell again from 107.4 in September to 106.4 in October;
Great Britain GDP 3Q 2011: This will be the second projections of the third quarter real GDP of GB. In the first projections the GDP of the 3Q2011 grew by 0.5%;
U.S. Jobless Claims: initial claims declined by 5,000 to 388,000 claims for the week ending on November 12th; the upcoming report may affect commodities traders;
U.S. Super-committee Failed to Cut Budget
The failure of the Super-committee to cut the future Federal Budget over the next decade, didn’t help stabilize the financial markets; the ongoing talks in Washington over the budget cuts will probably continue affecting the markets in the days to come. Despite this failure the rating agency S&P didn’t change U.S.’s credit rating. For more on the Super-committee see here.
The European Debt Crisis Update November 24th
The debt crisis in Europe took another turn as it now reached Germany’s doorstep: Germany didn’t draw enough bids to sell all its bonds: Germany’s auction only drew 3.9 billion euros for a six-billion-euro auction.
This bond sale failure may continue affecting forex traders and bring down the Euro which may also bring down commodities prices.
As of Wednesday, German government 10 year bonds yields inclined and reached 1.81% – a weekly increase of 0.09 percent points.
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate changed direction again and sharply fell on Wednesday by 1.21% to reach 1.3342 – the sharpest single day drop since November 9th. Other forex currencies also sharply depreciated against the US dollar including the Australian dollar and British Pound. Currently, however the Euro and other currencies are traded slightly up against the US dollar. The positive relation between major forex currencies and commodities prices will probably continue affecting the direction of gold and silver prices. So that if the Euro and other such currencies will rally (against the USD) from yesterday’s sharp falls, this may also pressure gold and silver prices to rise today.
U.S. Treasuries / Gold & Silver Prices – November
The U.S. 10-year Treasury yield sharply declined on Wednesday by 0.05 percent points to 1.89% – the lowest rate level since October 4th; during November the 10 year treasury yield dropped by 0.28 percent point. During November there were strong positive correlations among the U.S. 10 year notes yields and gold and silver prices.
This is also seen in the chart below that shows that as gold price declined, the 10 year treasury yield also fell. This relation may indicate that bullion is treated as a risky investment than safe haven instrument such as the U.S. treasury notes.
Therefore, if the long term U.S. treasury yields will continue to fall, it may pressure gold and silver prices to decline as well.
Current Gold and Silver Prices
The precious metals prices are currently traded slightly up in the European markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,699.90 per t oz. a $1.1 or 0.06% increase as of 10:59*.
Current silver price per ounce short term future (December 2011 delivery) is at $32.055 per t oz – a $0.091 or 0.28% incline as of 10:59*.
The current ratio of gold to silver prices per ounce is at 53.03.
Gold and Silver Prices Outlook:
Gold and silver prices continue to seek direction as they did in recent days. The failure of the Super-committee may continue to echo in the financial markets and push down major commodities prices. The European debt crisis is still far from over and Germany’s recent failure in bond sale may also raise the anxiety level in the markets and push traders towards safe haven investments such as U.S. treasury bonds and push away from commodities such as gold and silver.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
09:00 – German Business Climate Survey
13:30 – Great Britain Updated GDP 3Q 2011
13:30 – Department of Labor Report – U.S. Unemployment Claims
15:30 – EIA report on U.S. Natural Gas Market
For further reading:
Monthly Analysis and Outlook:
- Gold and Silver Prices Monthly Outlook for November 2011
- Natural Gas Prices Monthly Outlook for November 2011
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.