Gold and silver prices managed to bounce back on Friday after the sharp declines to these metals prices on Thursday. The U.S. debt talks will probably occupy the news cycle during the week with the Super-committee will try and propose budget cuts. Currently gold and silver prices are traded sharply down along with the rest of other major commodities prices such as crude oil prices. Today, the U.S. existing home sales report will be published.
Here is a market outlook of precious metals prices for today, November 21st:
Gold and Silver Prices – November Update
Gold price slightly rose on Friday by 0.28% to $1,725.1; silver price also inclined by 2.91% to $32.49. In the chart below, gold and silver prices had a rise and fall pattern during November (normalized gold and silver prices to October 31st 2011). Due to last week’s sharp falls, gold price‘s gains during the beginning of the month were erased and silver price declined by 5.4%.
The ratio between gold and silver prices sharply inclined on Friday, November 18th to 53.10. During November, gold price fell by a lower rate than silver price so that the ratio inclined by 5.7%.
Despite the differences in the trends of gold price and silver price during November, their correlation is still robust as seen in the chart below.
U.S. Super-committee’s and U.S. Debt Reduction Debate
The U.S. Super-committee will try to reach a resolution to cut at least $1.5 trillion from the Federal Budget over the next ten years; if the Super-committee won’t be able to reach an agreement among its members, there will be a “trigger mechanism” that will enact a $1.2 trillion automatic budget cut of the budget over the next decade. The deadline is set to Wednesday, November 23rd; many already predict the Super-committee will fail. In any case, the talks over a budget cut to reduce the growing U.S. debt will take the center stage during the week and could affect stocks and commodities traders.
The European Debt Crisis Update November 21st
Yesterday, Spain held its elections and the conservative party won by a landslide. The new forming government will act to cut the running deficit and the high debt Spain has. The current economic situation of Spain is dire with over 45% of young people out of work.
As of Friday, Spanish government 10 year bonds yields inclined and reached 6.41% – a weekly increase of 0.59 percent points. From the beginning of the month the Spanish government 10 year bonds yields rose by 1.17 percent points.
Over the weekend, Italy’s new Prime Minister, Mario Monti, passed two confidence votes in the Senate of his new government.
Today’s report will show the changes in U.S. existing home sales for October 2011; in the previous report regarding September the number of homes sold declined; this news could affect stocks and commodities traders (see here the recent review);
Forex Trading / Gold & Silver Prices – November
The Euro to U.S Dollar exchange rate changed direction on the last day of the week and rose by 0.50% to reach 1.3525. During November the correlations among the daily percent changes of gold price, silver price and leading forex exchange rates were robust; the strongest correlation. If the Euro, Australian dollar and Canadian dollar will continue their recent downward trend as they had during most of November, this trend may also affect precious metals’ prices to trade down as well.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded sharply down in the American markets:
Current gold price per ounce short term future (December 2011 delivery) is traded at $1,674.7 per t oz. a $50.4 or 2.92% decrease as of 17:44*.
Current silver price per ounce short term future (December 2011 delivery) is at $30.950 per t oz – a $1.539 or 4.74% decline as of 17:46*.
The current ratio of gold to silver prices per ounce is at 54.08.
Gold and Silver Prices Outlook:
Gold and silver prices sharply fell during last week, mainly on Thursday. The current talks over the debt reduction in the U.S. and Europe will probably occupy the news cycle and may affect commodities traders. If major exchange rates such as the Euro/USD will react to these news items and further appreciate the US dollar, it may also adversely affect the prices of gold and silver
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
15:00 – U.S. Existing Home Sales
13:30 – Core Retails Sales Canada (September 2011)
13:30 – (second estimate) US GDP 3Q 2011 Report
19:00 – FOMC Meeting Minutes
For further reading:
Monthly Analysis and Outlook:
- Gold and Silver Prices Monthly Outlook for November 2011
- Natural Gas Prices Monthly Outlook for November 2011