Gold & Silver Prices – Daily Outlook March 22nd 2012

Gold and silver prices continue to change directions from gains to losses. Yesterday they have ended in the green. Will this no clear trend continue today? Currently gold and silver price are falling. Today, U.S. Jobless Claims will be published (update: US jobless claims declined again), ECB President Draghi will give a speech, Bernanke will also give a speech, Canada’s retail sales report will be released along with EU Manufacturing PMI.  

Here is a short outlook on gold and silver prices for Thursday, March 22nd:

Gold and Silver– March Update

Gold price moderately rose on Wednesday by 0.2% to $1,650; silver also traded up by 1.23% to $32.23. During March, gold declined by 3.56% and silver by 6.97%.

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 22The ratio between gold and silver slightly declined to 51.21. In the past couple of weeks the ratio ranged between 50 and 51. During the month the ratio rose by 3.66% as silver has underperformed gold. In the chart below are the fluctuations of this ratio during the month.

Ratio Gold price forecast & silver prices 2012 March 22Gold Related News – March 22nd

There are reports that China’s manufacturing will continue to contract for the fifth consecutive month; according to the recent HSBC Manufacturing PMI the index slipped to 48.1 which still means the China’s manufacturing is shrinking. This news may be among the factors to drag down gold and silver prices during the day. China is among the leading countries in importing gold and silver.

On Today’s Agenda

Euro Area Manufacturing PMI: In the last flash report regarding February 2012, the Euro Zone Manufacturing PMI reached 49.7. This report will provide an indicator to the economic development of the Euro zone’s manufacturing conditions; this news may affect the Euro currency and consequently commodities prices;

ECB President Draghi Speaks: Following the ECB rate decision in which the rate remained unchanged at 1% the President of the ECB, Mario Draghi will give a speech. He may refer to the recent Greek bailout and the progress of the Euro zone economy. His speech may affect the Euro;

U.S. Jobless Claims Update: initial claims decreased to 351,000 claims for the week ending on March 10th; the upcoming update may affect the strength of the US dollar and consequently gold and silver prices;

Bernanke Speech: The Chairman of the Federal Reserve will give the second part of his speech which he started earlier this week. The title of the speech is “The Federal Reserve and the Financial Crisis” Part 2″;

Canada’s Retails Sales: This report examines the development in the retails sales in Canada during January 2012. It may affect the direction of USD/CAD exchange rate. In the recent report regarding December, retails sales slightly declined by 0.2% to $38.6 billion (see here the full report);

Forex / Gold & Silver Market – March

The Euro/U.S Dollar slightly declined on Wednesday by 0.07% to 1.3216. During March Euro/U.S Dollar decreased by 0.82%; furthermore, the Australian dollar also fell against the U.S. dollar by 0.21%. The Aussie dollar to US dollar and Euro/USD are 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 AUD/USD and gold price is 0.42). Thus if the AUD/USD and Euro/USD exchange rates will continue to decline today they  may indicate gold and silver may also trade down. Currently, the Euro/USD is slightly falling.

Correlation Gold Price and USD AUD October 2011 2012 March 22

Current Gold and Silver Prices March 22nd  

Gold (April 2012 delivery) is traded at $1,650.2 per t oz. a $0.1 or 0.01% decrease as of 08:37*.

Silver (April 2012 delivery) is at $32.14 per t oz – a $0.087 or 0.27% decrease as of 08:37*.

(* GMT)

Daily Outlook and Analysis  

Precious metals prices continue to zigzag as they have changed direction from gain to loss each day of the past five business days. The news regarding the slowdown of China’s manufacturing may adversely affect not only Australian dollar but also gold and silver prices. Today the progress of China may be the leading news to affect the prices of bullion. There are several news items from Europe and U.S that could tilt the scales and affect bullion prices. These news items include: the EU manufacturing index, ECB President Speech and U.S jobless claims. These events and reports may affect the direction of the Euro/USD and consequently indirectly affect the prices of gold and silver

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


10:00 – Euro Area Manufacturing PMI

13:30 –Retails Sales Canada (January 2012)

13:30 – U.S. Department of Labor– Jobless Claims Weekly Update

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

17:00 – ECB President Draghi Speaks

17:45 – Bernanke Speech


13:00 – Canada’s Core CPI

15:00 – U.S. New Home Sales

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