The week started with gold and silver prices trading up, after they had been climbing up during each day of last week. Will this trend continue?
Today, the US Mortgage delinquency rate for the second quarter of 2011 will be published.
Let’s examine the precious metals market for today, August 22nd:
Gold and silver prices –August
Gold and silver prices continue to break new highs: Gold price rose on Friday by 1.66% to $1,852; silver price also sharply inclined by 4.3% to $42.47.
During August, gold price increased by 13.5%, and silver price slightly inclined by 5.9%.
The chart below shows the normalized gold and silver prices (July 29th 2011=100). Gold and silver prices are currently on a sharp upward trend.
The ratio between gold and silver prices continues to remain around the 44-45 mark; on Friday, August 19th it reached 43.62. During August gold price has outperformed silver price as the ratio inclined by 7.2%, but in the past several days this situation is slowly shifting.
US Dollar & US Treasuries / Gold & silver prices – August update
The Euro to US dollar exchange rate continues to zigzag and finished the week on a 0.45% increase. The US 30-year Treasury yields continue to drop as the demand for U.S. Treasuries continues to rise over the fall of the stock markets. The high volatility in the forex market made a comeback; if the forex markets will continue with its high volatility, it could push up gold and silver prices.
S&P500 / Gold & silver prices – August update
The S&P500 index fell on Friday by 1.5% – and thus completed a weekly decrease of 4.69%. During August the linear correlation of gold and silver prices with S&P500 index (daily percent changes) was -0.518 (for gold) and -0.300 (for silver). This means, as the S&P500 index decreases, gold and silver prices rises. If the S&P500 index will continue to lose ground, it may further push gold and silver prices up.
U.S. Mortgage delinquency
Today, the U.S. mortgage delinquency report will be published. During the first quarter, the seasonally adjusted deliquesce rate slightly increased to 8.32% – up by 7 basis points from the fourth quarter 2010, but declined by 174 basis points from 1Q 2010. This figure is another good indication of the real estate market condition in the U.S. and consequently the economic progress of the US.
Current Gold and Silver prices
The precious metals prices are currently traded up in the U.S. markets:
Current gold price short term future (September 2011 delivery) is traded at $1,864.8 per t oz. a $12.6 or 0.68% increase as of 14:01*.
Current silver price short term future is at $42.995 per t oz – a $0.488 or 1.15% incline as of 14:02*.
The current ratio of gold to silver prices is at 43.35.
Gold and silver prices Outlook:
Gold and silver prices continue their climb up at higher pace than in the past several days after the stock markets resumed their sharp falls over concerns of another recession in US and Europe I still think that gold and silver prices will continue their rally, but in the next several days they will slow down their ascent and will trade up at a slower pace than in the beginning of August.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
15:00– US Mortgage delinquency rate Q2 2011
08:00– French and German flash manufacturing PMI (August 2011)
10:00 – Euro and German ZEW economic sentiment
13:30 – Core retails sales Canada (May 2011)
15:00 – U.S. new home sales
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.