Gold price continued to decline yesterday after the sharp falls recorded a day earlier; silver price on the other hand changed direction and slightly rallied. The U.S. Producer Price Index slightly inclined according to yesterday’s PPI report, and the Philly Fed Manufacturing Index also rose in December. Today, the ECB President will give a speech, and the U.S. Consumer Price Index report. Currently gold and silver are traded up.
Here is a market outlook of precious metals prices for today, December 16th:
Gold and Silver Prices –December Update
Gold price slipped on Thursday by 0.61% to $1,577.2 – the lowest price level since July 12th; silver price on the other hand rose by 1.17% to $29.27. The chart below shows the changes of gold and silver prices during the month (normalized gold and silver prices to November 30th 2011). During December gold price decreased by 9.9% and silver price by 10.8%.
Despite the sharp fall recorded during December mainly during this week in gold price, many analysts still consider there will be a rally in gold price during next week according to a recent Bloomberg survey.
There are also signs that the fundamental still show gold price to remain high according to the report. In the mean time, hedge funds continue to remain bullish on commodities.
On Today’s Agenda
ECB President Speaks: Mario Draghi will give another speech after he had given a speech yesterday; this speech may influence commodities traders;
U.S Consumer Price Index: This monthly report will show the main changes in the consumer price index during November. According to the U.S Bureau of Labor statistics for October, the CPI decreased by 0.1% but inclined over the last 12 months by 2.1%. The main reasons for this decrease are related to the sharp falls in energy prices;
Forex Trading / Gold & Silver Prices – December Update
The Euro to U.S Dollar changed direction on Thursday by 0.26% to reach 1.3016. Other forex exchange rates such as the Australian dollar and Swish Franc also appreciated against the US dollar. The appreciation of these currencies may also affect gold and silver prices to rise.
American Stock Markets / Gold & Silver Prices – Update
The S&P500 index slightly rose yesterday along with the rest of the American stock markets; on Thursday the S&P500 index rose by 0.32% to 1,215.75. The S&P500 index continues to be strongly and positively correlated to gold and silver prices (during December the linear correlation was 0.597 and 0.682, respectively), so that if the stock market will continue to rally today as well, it may also indicate that gold and silver prices are likely to follow and rise.
The major precious metals are currently traded up in the European markets:
Current gold price per ounce short term future (January 2012 delivery) is traded at $1,591.40 per t oz. a $14.2 or 0.90% increase as of 08:45*.
Current silver price per ounce short term future (January 2012 delivery) is at $29.530 per t oz – a $0.256 or 0.87% increase as of 08:45*.
Gold and Silver Prices Outlook:
Gold and silver prices may recover today from the sharp falls recorded during the week as a correction. The positive report of the Philly Fed may keep pushing up the major commodities prices including gold and silver prices. If the market sentiment will continue to be positive today as it was yesterday in the Stocks and Forex markets, then it may also help rally precious metals prices as well.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
08:30 – ECB President Speaks
13:30 – Report of U.S CPI
For further reading:
Monthly Analysis and Outlook:
- Gold and Silver Prices Monthly Outlook for December 2011
- Natural Gas Prices Monthly Outlook for December 2011
About the Author: Lior Cohen, M.A in Economics, a commodities analyst and blogger at Trading NRG.