Gold and silver prices sharply rose for the second consecutive business day and thus cut the losses of both metals they have incurred during March. The big news from yesterday was Bernanke’s speech on the labor market, which rekindled the speculation of the Fed’s monetary intervention in the U.S market. This in turn may have been among the key factors in pushing bullion prices up during yesterday’s trading. Currently gold and silver are trading up. Today, U.S. consumer confidence report will be published, and Bernanke will give a short speech (but not in the same magnitude to affect the markets as yesterday’s speech).
Here is a short forecast on gold and silver prices for Tuesday, March 27th:
Gold and Silver– March Update
Gold price sharply rose on Monday by 1.4% to $1,688; silver also traded up by 1.48% to $32.75. During March, gold declined by 1.35% and silver by 5.46%.
The chart below shows the developments of gold and silver prices during the month so far (prices are normalized to February 29th).
The ratio between gold and silver slipped to 51.55. During the month the ratio rose by 4.35% as silver has underperformed gold. In the chart below are the changes in this ratio during the month.
On Today’s Agenda
U.S Consumer Confidence: according to the recent report, the consumer confidence index increased in February compared with January’s index. The current expectations are that this index may change direction and decline in the March index despite the U.S. economy’s signs of progress; this report might affect the direction of the US dollar and consequently gold and silver prices;
Bernanke Speech: The Chairman of the Federal Reserve will give another speech this week. The speech is part of four piece lecture series. The title of this speech is “The Federal Reserve and the Financial Crisis” Part 3″;
Forex / Gold & Silver Market – March
The Euro/U.S Dollar rose on Monday by 0.67% to 1.3359. During March Euro/U.S Dollar edged up by 0.26%; furthermore, the Australian dollar Canadian dollar also appreciated against the U.S. dollar by 0.68%, and 0.73%, respectively. The Aussie dollar, CAD and Euro were historically linearly correlated with the daily percent changes of gold and silver prices. If the Euro/USD and AUD/USD currencies pair will keep their rally today then they may indicate gold and silver prices may also rise. Currently, the Euro/USD is slightly rising.
Current Gold and Silver Prices March 27th
Gold (April 2012 delivery) is traded at $1,694.3 per t oz. a $6.1 or 0.36% increase as of 09:51*.
Silver (April 2012 delivery) is at $33.04 per t oz – a $0.29 or 0.89% increase as of 09:50*.
(* GMT)
Daily Outlook and Analysis
Gold and silver prices started to show strength in the last couple of days as both metals trade up sharply in the last couple of business day. The recent dovish speech of Bernanke regarding the labor market will probably continue to have lingering effects on the precious metals markets. Even though the fundamentals haven’t changed, the recent market sentiment may have shifted again and we might be seeing speculative funds entering the gold and silver market and thus driving gold and silver prices up. Today, the U.S consumer confidence report may also affect the U.S dollar and consequently precious metals prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
15:00 – U.S Consumer Confidence
17:45 – Bernanke Speech
Tomorrow
09:00 – Euro Area Monetary Development
09:30 – Great Britain Current Account
09:30 – Great Britain Updated GDP 4Q 2011
13:30 – U.S Core Durable Goods
15:30 – EIA Crude Oil Stockpiles Report
For further reading: