Gold & Silver Prices – Daily Outlook April 17th 2012

Gold and silver prices didn’t do much yesterday however things might change today seeing that there are many news items on today’s agenda including: Great Britain CPI, German and Euro Area ZEW economic sentiment, U.S. Housing Starts and Building permits, Bank of Canada’s Overnight Rate and ECB President Draghi Speaks.

It will be interesting how all these items and events will play out today and affect the financial markets (if at all). Currently gold and silver prices are slightly rising.  

Here is a short outlook on gold and silver prices for Tuesday, April 17th:

Gold and Silver– April Update

Gold price declined on Monday by 0.63% to $1,649; silver also slipped by 0.05% to $31.37. During April, gold decreased by 1.33% and silver by 3.42%.

The chart below presents the changes in gold and silver prices during the month (prices are normalized to March 30th).

Gold price & silver prices 2012  April 17The ratio between gold and silver edged down to 52.58. During the month the ratio increased by 2.17% as gold has outperformed silver. In the chart below are the shifts in this ratio during April (up to date).

Ratio Gold price forecast & silver prices 2012 April 17On Today’s Agenda

Great Britain CPI: my current expectations are that the March inflation will be lower than in previous months; in the recent report regarding February the annual CPI slipped from 3.6% to 3.4%; this news may affect the path of the British pound;

Euro Area and German ZEW economic sentiment: During March 2012 the ZEW indicator for Germany increased to 22.3; as Germany’s economy is keep showing progress, the Euro will probably remain strong against other currencies.  The upcoming publication will also refer to Euro Area;

U.S. Housing Starts and Building Permits: the housing starts was historically correlated with gold price – as housing starts fell, gold prices tended to rise the following day (even when controlling to the U.S dollar effect); if the housing starts will decline again as they did in the previous month this could rally bullion prices (the recent U.S building permits and housing starts review);

Bank of Canada’s Overnight Rate: The Bank of Canada will publish its decision vis-à-vis the overnight interest rate; this rate decision may affect the local currency which is strongly linked with bullion prices ;

ECB President Draghi Speaks: Following the April ECB rate decision in which the rate remained unchanged at 1% the President of the European Central Bank will speak and may refer in his speech to the recent events in Spain and may talk about the ECB’s plan to calm the markets including implementing LTRO 3 or resuming the SMP. His speech may influence the Euro/USD which is strongly linked with precious metals prices;

Forex / Gold & Silver Market – April

The Euro/U.S Dollar bounced back and rose on Monday by 0.49% to 1.3142. During April Euro/U.S Dollar decreased by 1.5%; on the other hand, yesterday the Aussie dollar slightly depreciated against the U.S. dollar by 0.14%. These currencies tend to be positively and linearly correlated with the daily percent developments of gold and silver prices. Thus, if the Euro and Australian dollar currencies will change direction again and they will both trade down, they may signal gold and silver may also drop.

Current Gold and Silver Prices April 17th

Gold (May 2012 delivery) is traded at $1,653.5 per t oz. a $3.8 or 0.23% increase as of 10:21*.

Silver (May 2012 delivery) is at $31.58 per t oz – a $0.162 or 0.52% increase as of 10:21*.

(* GMT)

Daily Forecast and Analysis  

Gold and silver prices continued their downward trend from Friday and slipped on Monday; this trend however might change direction if there will be some good news from Europe: the upcoming reports regarding Germany and EU might do the trick; if the ECB President will refer to another rescue program by the ECB this could also be a positive news to rally the Euro and thus gold and silver prices are likely to benefit as well and rise. On the other hand, if the U.S reports will be positive (housing starts), then the USD may rise and thus gold and silver prices might continue their descent.

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


09:30 – Great Britain CPI

10:00 –German ZEW economic sentiment

10:00 –Euro Area ZEW economic sentiment

13:30 – U.S. Housing Starts

13:30 – U.S. Building Permits

14:00 – Bank of Canada’s Overnight Rate

17:00 – ECB President Draghi Speaks


09:30 – MPC Meeting Minutes

15:30 – U.S Crude Oil Stockpiles Report

For further reading: