Gold & Silver Prices – Daily Outlook April 18th 2012

Gold and silver prices continue to zigzag and perhaps the market is just waiting for next week’s FOMC meeting to see if there won’t be any big surprises or announcements that could affect the bullion markets (did someone say QE3?). In the mean time, the market will probably continue to shift from gains to losses. The stock markets sharply rose yesterday perhaps due to the easing concerns over the EU debt crisis, the announcement that IMF raised the global growth forecast from 3.3 to 3.5 in 2012 – this was the first raise since 2011. Alternatively the housing starts declined but that didn’t seem to have much of an adverse effect on stock markets, and only little positive effect (if at all) on bullion prices.  Today, the minutes of the recent MPC meeting will be released. Currently gold and silver prices are slightly falling.  

Here is a short outlook on gold and silver prices for Wednesday, April 18th:

Gold and Silver– April Update

Gold price edged down on Tuesday by 0.55% to $1,651; silver increased by 0.9% to $31.67. During April, gold decreased by 1.24% and silver by 2.49%.

The ratio between gold and silver slipped again to 52.13. During the month the ratio increased by 1.17% as gold has moderately 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 18Despite the different daily percent changes of gold and silver prices in recent days, the linear correlation of their daily percent changes is still strong and robust as presented in the chart below.

Correlation Gold Prices silver price 2012 April 18Gold Related News April 18th

Gold sales from Australia declined during March: According to a recent report, Perth Mint, which processes all of Australia’s bullion, decreased by 9.6% during March. This news might have been due to the Jewelers’ strike in India during last month or a decline in demand for gold for investments. Either way, if this trend will continue, this may adversely affect gold price’s performance in the near future.

On Today’s Agenda

MPC Meeting Minutes: Following the recent MPC meeting, in which it was announced the rate will remain flat at 0.5% and the asset purchase program will remain at £325 billion, the minutes of the meeting might offer some perspective behind this decision and perhaps hint of the next steps of the MPC;

Forex / Gold & Silver Market – April

The Euro/U.S Dollar rose on Tuesday by 0.14% to 1.3142. During April Euro/U.S Dollar decreased by 1.51%.. The Euro tends to be positively and linearly correlated with gold and silver prices. Therefore, if this currency pair  will trade down, it may signal gold and silver may also decline.

Current Gold and Silver Prices Prices April 18th

Gold (May 2012 delivery) is traded at $1,644.6 per t oz. a $6.5 or 0.39% decrease as of 15:05*.

Silver (May 2012 delivery) is at $31.5 per t oz – a $0.174 or 0.55% decrease as of 10:06*.

(* GMT)

Daily Forecast and Analysis  

Gold and silver prices continued to zigzag in recent days; even though both metals didn’t perform well during most of the month (so far) their fall wasn’t sharp and they could change direction if there will be another speculative movement in anticipation for next week’s FOMC meeting. In the mean time, I suspect gold and silver prices will continue to dwindle and move in a similar direction as the major currencies move with respect to the US dollar (Euro, Aussie, Canadian dollar).

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


09:30 – MPC Meeting Minutes

15:30 – U.S Crude Oil Stockpiles Report


13:30 – U.S. Jobless Claims Weekly Report

15:00 – U.S. Existing Home Sales

15:00 – Philly Fed Manufacturing Index

15:30 – Bank of Canada’s Monetary Policy & Press Conference (at 16:15)

15:30 – EIA U.S. Natural Gas Storage Report

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