Following the sharp gains to gold and silver prices on Monday, the trading slowed down yesterday and gold and silver prices ended the trade nearly unchanged . Currently gold and silver prices are traded up. Today, the minutes of the recent FOMC meeting will be published, Jean Claude Trichet will give a speech, and Australia’s unemployment rate will be published as well.
Here is a market outlook of precious metals prices for today, October 12th:
Gold and Silver Prices – October Update
Gold price slightly declined on Tuesday by 0.59% to $1,661.0; silver price on the other hand inclined by 0.06% to $32.00. The chart below shows the changes of gold and silver prices during October (normalized gold and silver prices (September 30th 2011=100)). During the current month, gold price inclined by 2.4%, and silver prices by 6.4%.
The ratio between gold and silver prices slightly slipped on October 11th to 51.91. During October, silver price inclined by a slightly larger rate than gold price as the ratio decreased by 3.7%.
On Today’s Agenda:
FOMC Meeting Minutes: Following the last FOMC meeting, in which the Fed’s plan to purchase LT securities at $400 billion was announced, the minutes might bring some insight regarding this decision, and thus add some more information regarding the next steps of the FOMC in the near future that could affect the financial markets (see here FOMC decision);
ECB Conference Trichet Speaks;
Australia Rate of Unemployment: in the previous August report the unemployment rate slightly inclined to 5.3%, and number of employed people slightly fell by 9,700 during August. If this trend will continue it could further affect the Australian dollar and consequently perhaps even the bullion markets (see here the recent report);
U.S Dollar / Gold & Silver Prices – October
The AUD/U.S Dollar exchange rate slipped on Tuesday by 0.35% to reach 0.9953; other currencies also followed and weakened against the USD including the Canadian dollar and YEN. If these currencies (AUD YEN and CAD) will continue to decline today it could further curb the progress of gold and silver prices.
U.S. Treasuries / Gold Price – October
The U.S. 10-year Treasury yield continued to rise and yesterday increased by 0.08 percent points to 2.18%; during October the 10 year treasury yield rose by 0.26 percent point. This shift coincides with the light optimism in the markets of the progress in the U.S. economy and the European debt crisis. If the U.S. long term securities’ yields will continue rising, it might suggest gold price may eventually decrease as gold and U.S. treasuries are considered safe havens.
Current Gold and Silver Prices
The precious metals prices are currently traded slightly up in the European markets:
Current gold price short term future (November 2011 delivery) is traded at $1,675.70 per t oz. a $14.7 or 0.89% increase as of 08:06*.
Current silver price short term future (November 2011 delivery) is at $32.370 per t oz – a $0.372 or 1.16% incline as of 08:07*.
The current ratio of gold to silver prices is at 51.76.
Gold and Silver Prices Outlook:
Gold and silver prices settled down yesterday after the sharp gains on Monday; the uncertainty in the markets continue to remain high and these uncertain times it’s likely that gold and silver will thrive, therefore I still speculate that gold and silver prices will continue their slow comeback unless there will be breaking new developments regarding the European debt crisis. The minutes of the recent FOMC meeting might provide some insight and additional speculations around the Fed’s next step which could affect substantially the financial markets including gold and silver.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Tentative –IEA monthly oil report
15:30 – EIA Report on Crude Oil Stockpiles
19:30 – FOMC meeting minutes
19:30 – ECB Conference Trichet Speaks
2:30 – Australia Rate of Unemployment
13:30 – Department of Labor Report – U.S. Unemployment Claims
13:30 –Canadian Trade Balance
13:30 –American Trade Balance
15:30 – EIA report on U.S. Natural Gas Market
19:00 –U.S. Federal Budget Balance
3:00 – Chinese CPI
For further reading:
- Weekly Outlook for October 10-14
- Gold and Silver Prices Monthly Outlook for October 2011
- Gold & Silver Prices | Weekly Recap 3-7 October
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.