Gold & Silver Prices – Daily Outlook October 10

Gold and silver prices changed direction again and slightly slipped on the last day of last week, after the U.S. non-farm employment report showed an increase of 103k in employment during September. Currently, gold and silver prices are traded up. The speculation around the European debt crisis continues to be high with an update of the recent news on this issue herein. Today, the French and Italian industrial production report will be published, and Japan’s current account.  Here is a market outlook of precious metals prices for today, October 10th:

Gold and Silver Prices – October Update

Gold price declined on Friday by 1.05% to $1,635.8; silver price sharply fell by 3.16% to $30.99. The chart below shows the development of gold and silver prices during October (normalized gold and silver prices (September 30th 2011=100)). During October gold price inclined by 0.8%, and silver prices by 3.0%.


Gold price forecast & silver prices outlook 2011 October 10

The ratio between gold and silver prices slightly rose on Friday, October 7th to 52.78. During October, silver price inclined by a larger rate than gold price as the ratio decreased by 2.1%.


Ratio Gold price forecast & silver prices outlook 2011 October 10

From the European Debt Crisis Front – Update and Analysis

Following the tumbling of Dexia, it was reported today that Belgium has agreed to pay 4 billion euros to purchase the local unit of the bank.

Fitch, rating agency, followed the footsteps of S&P and Moody’s and announced it lowered the credit rating of Italy and Spain.

These news items could affect traders by adding uncertainly to the financial markets and consequentially push traders towards safe haven investments including gold and silver. This analysis coincides with the recent report from Bloomberg that short selling is at the highest level since 2006.

U.S Employment Grew by 103k in September

 The U.S. employment inclined in September by 103,000 according to the last U.S. labor report, which was published on Friday, October 7th by the Bureau of Labor Statistics. The rate of unemployment remained unchanged at 9.1%.

Historically, as the U.S employments rise gold price tend to decrease; this correlation was mostly due to the effect this news had on the US dollar; the recent news seem to have worked again in the same direction as indicated in the updated table below:

U.S.Labor Reports in 2011 gold price and silver prices October 10

It shows the correlation between the news of the U.S. labor report and the daily changes in gold and silver prices up to the last report of October 7th, 2011 (the complete analysis can be found in the gold and silver prices daily outlook for October 7th).

 US Dollar / Gold & Silver Prices – October

The EURO/US Dollar exchange rate slightly slipped on Friday by 0.44% to reach 1.3378; the Canadian dollar also followed and depreciated against the US Dollar by 0.24%. If major risky currencies (AUD and CAD) will change direction and start to appreciate against the US Dollar, they may help gold and silver prices to incline.

S&P500 / Gold Price – October

The S&P500 index changed direction and slightly declined on Friday by 0.82%, but during October the S&P500 index increased by 2.12%. If the stock market will continue to rally today as they did during the month so far, it may curb the gains in gold and silver prices.

U.S. Treasuries / Gold Price – October

The US 10-year Treasury yield sharply increased again on Friday by 0.09 percent points to 2.10%; during October the 10 year treasury yield rose by 0.18 percent point. This shift coincides with the new optimism in the markets of the progress in the U.S. economy. If the U.S. long term securities’ yields will continue rising as they did last week, it might suggest gold price may eventually decrease.

Current Gold and Silver Prices

The precious metals prices are currently traded up in the European markets:

Current gold price short term future (November 2011 delivery) is traded at $1,659.70 per t oz. a $23.9 or 1.46% increase as of 09:04*.

Current silver price short term future (November 2011 delivery) is at $31.990 per t oz – a $0.997 or 3.22% incline as of 09:04*.

The current ratio of gold to silver prices is at 51.88.

(* GMT)

Gold and Silver Prices Outlook:

Gold and silver prices changed direction on Friday and fell following the U.S. labor report, but currently they are traded slightly up. The bullion continues to demonstrate lack of direction with the speculation around the European debt crisis news brings each day mixed signals. The recent news from U.S. about the labor report might keep the misdirection of the precious metals’ prices in the short run,  but as long as the uncertainty in the markets remains high, gold and silver will likely to make a comeback and their prices will continue their moderate rally during October.

Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):


07:45 – French Industrial Production Report

09:00 – Italy’s Industrial Production Report

24:50 – Japan’s current account

01:30 – Australia’s business confidences survey


08:30 – ECB conference Trichet

13:15 – Canadian Housing Starts

Tentative –OPEC monthly report


 For further reading:

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