Gold and silver prices ended the week with little changes as they only slightly declined on Friday. The U.S. CPI rose by 0.2% during January according to a recent report which was published on Friday. Yet this news didn’t cause much of a reaction in the financial markets. Currently gold and silver prices are increasing. Today, the U.S markets will be closed due to President’s Day so the commodities trading will only be in Europe and Asia. The financial news for today will revolve around the meeting of EU ministers of finance regarding the approval of the second bailout of Greek economy.
Here is a short review of the financial news and events related to metals, and an outlook for metals prices for Monday, February 20th:
Gold and Silver– February Update
Gold price slightly decreased on Friday by 0.14% to $1,725.9; silver on also slightly fell by 0.26% to $33.28. During February, gold declined by 0.83% while silver rose by 0.06%.
The chart below presents the developments of gold and silver during the month (prices are normalized to January 31st).
The ratio between gold and silver moderately increased on Friday, February 17th at 51.86. During February the ratio slightly declined by 0.89% as silver has moderately outperformed gold. In the chart below you can see the development of this ratio during February.
Monetary Policy Meeting Australia’s Bank: The minutes of the monetary policy meeting of the reserve bank of Australia presents the main factors that affected the board’s decision to leave the Bank’s basic interest rate unchanged at 4.75%; this decision may affect the Aussie dollar currency and consequently gold (see here last rate decision);
Governor Stevens of the RBA speaks: The governor of Reserve Bank of Australia will participate in a discussion panel in the Australian Securities Investments Commission;
Forex / Gold & Silver Market – February
The Euro/U.S Dollar slightly rose on Friday by 0.08% to 1.3140. During February Euro/U.S Dollar increased by 0.44%; furthermore, the Australian dollar depreciated against the U.S. dollar by 0.45%. The correlation between Aussie dollar and metals is still robust (the linear correlation between Aussie dollar and gold price is 0.63 over the past month). If the Euro and Australian dollar will rally today, it could indicate that gold and silver prices will also increase. Currently, the Euro/USD and AUD/USD are increasing.
Current Gold and Silver Prices February 20th
Gold (March 2012 delivery) is traded at $1,732.7 per t oz. a $6.8 or 0.39% increase as of 08:44*.
Silver (March 2012 delivery) is at $33.57 per t oz – a $0.288 or 0.87% increase as of 08:44*.
Gold and Silver Prices Daily Forecast
Gold and silver prices didn’t do much during last week but this week this might change: if there will be developments regarding the Greek bailout, it could affect the Euro and consequently the direction of gold and silver prices. But for today’s trading, since the U.S. markets are closed and there aren’t many reports to come out, I speculate there will be little movement in the precious metals markets.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
12:30 – Monetary Policy Meeting Australia’s Bank
2:30 –Bank of Australia Governor Stevens speaks
09:30 – Great Britain Net borrowing
13:30 –Retails Sales Canada (December 2011)
2:30– China flash Manufacturing PMI
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