Gold & Silver Prices – Daily Outlook March 23rd 2012

Gold and silver prices slightly declined yesterday and thus continue their unclear trend as they zigzag from gains to losses on a daily basis. Yesterday they have ended in the trading day in the red. It was reported yesterday that the EU manufacturing index declined to 48.7 (49.3 in February). This news may have been among the factors to drag down the Euro and bullion prices. Currently gold and silver are trading up. Today, U.S. new home sales will be published (update: US homes sales declined), and Canada’s core consumer price index.  

Here is a short outlook on gold and silver prices for Friday, March 23rd:

Gold and Silver– March Update

Gold price moderately declined on Thursday by 0.47% to $1,642; silver also traded down by 2.74% to $31.35. During March, gold declined by 4.02% and silver by 9.52%.

The chart below shows the developments of gold and silver prices during the month so far (prices are normalized to February 29th).

Gold price & silver prices 2012  March 23The ratio between gold and silver rose to 52.40 and this broke the 51 boarder for the first time since January 2012 after the ratio ranged between 50 and 51 during the past couple of weeks. During the month the ratio rose by 6.08% as silver has underperformed gold. In the chart below are the changes in this ratio during the month.

Ratio Gold price forecast & silver prices 2012 March 23On Today’s Agenda

U.S. New Home Sales: This report will refer to January 2012; in the previous report (January 2012), the sales of new homes declined by 0.9% to 321,000; if the number of home sales will show a decrease in the upcoming report, it may also indicate a slowdown in the U.S real estate market which may also affect strength of the US dollar.

Canada’s Core CPI: This report will refer to the core consumer price index changes during February 2012 when controlling the volatile components such as energy, fruit and vegetables. According to the Canadian CPI report for January 2012, the core CPI increased by 1.6% from January 2011 to January 2012. This report could affect the strength of Canadian dollar, which is strongly correlated with gold and silver prices;

Forex / Gold & Silver Market – March

The Euro/U.S Dollar slightly edged down on Thursday by 0.11% to 1.3201. During March Euro/U.S Dollar decreased by 0.93%; furthermore, the Australian dollar Canadian dollar also depreciated against the U.S. dollar by 0.68%, and 0.71%, respectively. The Aussie dollar, Canadian dollar and Euro were historically linearly correlated with the daily percent changes of gold and silver prices (see below the chart; as of March the linear correlation of the Euro/USD and gold price is 0.60). Thus if the Euro/USD currencies pair will change direction and rally today it may indicate gold and silver may also increase. Currently, the Euro/USD is slightly rising.

Correlation Gold Price and EURO USD October 2011 2012 March 23

Current Gold and Silver Prices March 23rd  

Gold (April 2012 delivery) is traded at $1,646.3 per t oz. a $3.8 or 0.23% increase as of 08:22*.

Silver (April 2012 delivery) is at $31.62 per t oz – a $0.275 or 0.88% increase as of 08:22*.

(* GMT)

Daily Outlook and Analysis  

Gold and silver prices continue to shift from gains for losses with an unclear trend. The news regarding the slowdown of China and EU’s manufacturing may have adversely affected not only the Euro, Aussie dollar and Yen but also gold and silver prices. Today, there are several news items from Canada and U.S that may affect precious metals prices. If the U.S. report will be negative and several currencies such as Euro and Aussie dollar will trade up, then it is likely that gold and silver prices will follow and increase.    

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


13:00 – Canada’s Core CPI

15:00 – U.S. New Home Sales

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