Gold and silver prices sharply fell on the last day of October after they had risen during recent weeks. Today the FOMC meeting will commence; the statement of the FOMC decisions followed by Bernanke’s press conference will be held tomorrow. Currently gold and silver prices are traded down. Today, the U.S. Manufacturing PMI report will be published and Great Britain’s GDP growth rate report for Q3 2011.
Here is a market outlook of precious metals prices for today, November 1st:
Gold and Silver Prices – October Update
Gold price sharply fell on Monday by 1.26% to $1,725.2; silver price also declined by 2.65% to $34.35. The chart below shows the changes in gold and silver prices during October (normalized gold and silver prices (September 30th 2011=100)). During October, gold price increased by 6.3% and silver prices by 14.2%.
The ratio between gold and silver prices rose on Monday, October 31st to 50.22. During October, silver price inclined by a slightly larger rate than gold price as the ratio slipped by 6.9%.
On Today’s Agenda:
U.S. ISM Manufacturing PMI: This report will present the change in manufacturing sector on a national level during October. In September the index grew to 51.6% a one percent point increase; this index might affect traders of forex, and commodities (see here my review of last report);
GB GDP Q3 2011: This report examines the quarterly growth rate of the British economy during the third quarter; during the previous quarter the GB economy grew by only 0.2%;
Forex Exchange Rates / Gold & Silver Prices – October
The Euro to U.S Dollar exchange rate sharply fell on Monday by 2.04% to reach 1.3858 – the lowest level since October 20th. The recent involvement of Japan in the forex exchange rate markets to depreciate the YEN against the USD and other currencies in an attempt to protect Japan’s exporters, might continue to affect the Forex markets today including other currencies such as EURO and AUD to fall against the USD and consequently may also be a partial explanation for the recent decline in gold and silver prices.
U.S. Treasuries / Gold & Silver Prices – October
The U.S. 10-year Treasury yield continued to decline on Monday by 0.17 percent points to 2.17%; during October the 10 year treasury yield rose by 0.25 percent point. The LT yields sharply fell in the past couple of business days and coincided with the sharp falls in gold and silver prices. If the yields will continue to fall, this might indicate a curb in the recent growth in risk appetite in the markets that may also curb the demand for commodities as well as stocks.
S&P500 / Gold & Silver Prices – October
The S&P500 index sharply fell on Monday by 2.47% to reach 1,253.8; during October the S&P500 index added 10.77% to its value. During October, the correlation between the S&P500 index and silver prices was positive and moderately strong, which means that, as oppose to previous months, the recent rally in precious metals prices coincided with the sharp rises in S&P500 index. If the stock markets will continue to fall, this may also affect precious metals prices to drop as well.
Current Gold and Silver Prices Per Ounce
The precious metals prices are currently traded down in the European markets:
Current gold prices per ounce short term future (December 2011 delivery) is traded at $1,709.8 per t oz. a $15.4 or 0.89% decrease as of 10:00*.
Current silver prices per ounce short term future (December 2011 delivery) is at $33.595 per t oz – a $0.759 or 2.21% decline as of 10:01*.
The current ratio of gold to silver prices per ounce is at 50.87.
Gold and Silver Prices Outlook:
The sharp falls in gold and silver prices at the last day of October only put a small dent in the sharp gains to these precious metals’ prices during last month. The downfall might continue throughout the day for gold and silver prices as this trend continues to coincide with the sharp falls in major Forex currencies such as YEN, EURO and AUD against the USD.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
10:30 – GB GDP Q3 2011
15:00 – U.S. ISM Manufacturing PMI
13.30 – ADP estimate of U.S. change in non-farm employment
15:30 – EIA Report on Crude Oil Stockpiles
17:30 – FOMC Meeting (Statement)
19:15 – FOMC Press Conference – Bernanke Speaks
1:30 – Australian Retail Trade
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