Gold and silver prices continue to dwindle as they have finished yesterday’s trading with moderate falls. Its still seems that Greece will have to pass additional budget cuts before it will receive the second bailout package. This news might affect the forex and commodities markets during the day. Currently gold and silver prices are rising. Today, the following events and publications will be on the agenda: Euro Area GDP for the fourth quarter of 2011, Bank of England’s Governor King speaks and the minutes of the last FOMC Meeting.
Here is a report of major news and events, and an analysis of metals prices for Wednesday, February 15th:
Gold and Silver– February Update
Gold price slightly declined yesterday by 0.42% to $1,717.7; silver also slightly decreased by 1.11% to $33.35. During February, gold declined by 1.3% while silver rose by 0.26%.
The chart below presenters the development of gold and silver during February (prices are normalized to January 31st).
The ratio between gold and silver moderately rose on Tuesday, February 14th at 51.51. During February the ratio declined by 1.56% as silver has moderately outperformed gold. In the chart below is the development of this ratio during February.
St. Deviation of Gold and Silver
During recent months there has also been a downward trend in the volatility of gold and silver prices as their standard deviations have declined; as of February they have reached their lowest level since July 2011. This might suggest that precious metals fluctuate less in recent weeks than they have in the past.
On Today’s Agenda
FOMC Meeting Minutes: Following the recent FOMC meeting, in which it was decided to extend the pledge of keeping the interest rates low until late 2014. The minutes of the meeting might offer some insight behind this decision;
Euro Area GDP 4Q2011 Report: Germany France and Italy will publish their preliminary fourth quarter GDP for 2011. The GDP growth rate of the Euro Area will also come out. During the third quarter of 2011, the Euro Area GDP grew by only 0.2% (Q-o-Q). This news might affect the Euro; the current expectations are of a low growth rate in Q4 2011 (see here recent report);
Bank of England’s Governor King speaks: The governor of Bank of England will give a speech that could offer some insight to the recent BOE interest rate decision and monetary decision (see here last statement);
Forex / Gold & Silver Market – February
The Euro/U.S Dollar also slightly declined during yesterday’s trading by 0.39% to 1.3134. During February Euro/U.S Dollar rose by 0.79%; other currencies such as the Australian dollar also slightly depreciated against the U.S. dollar. During recent weeks there were strong linear correlations among the EURO and Australian dollar and precious metals. If the Euro and Australian dollar will change direction and trade up today, it could indicate that metals will follow and also rise. Currently, the Euro/USD is rising.
Current Gold and Silver Prices February 15th
Gold (March 2012 delivery) is traded at $1,728.5 per t oz. a $10.8 or 0.63% increase as of 07:52*.
Silver (March 2012 delivery) is at $33.705 per t oz – a $0.357 or 1.07% increase as of 07:52*.
(* GMT)
Gold and Silver Prices Outlook and Analysis
Gold and silver prices continue to zigzag from gains to losses with no clear trend. Despite their moderate decline during yesterday’s trading, they have already started off the day rising. Their shifts of recent weeks coincide with the direction of the Euro and Australian dollar. Thus, these currencies’ path during today’s trading might also affect the direction of the gold and silver prices. The recent development from Greece might the Euro during the day. Finally, the financial reports that will come out today including the EU GDP report and the minutes of the last FOMC meeting might influence forex and commodities traders, assuming there will be unexpected results.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
10:00– Euro Area GDP 4Q2011 Report
10:30 –Bank of England’s Governor King speaks
15:30 – EIA Crude Oil Market Report
19:00 – FOMC Meeting Minutes
Tomorrow
13:30 – U.S. Housing Starts
13:30 – U.S. Building Permits
13:30 –U.S. Unemployment Claims
13:30 – U.S. Producer Price Index
14:00 – Bernanke Speech
15:00 – Philly Fed Manufacturing Index
15:30 – EIA U.S. Natural Gas Market Report
For further reading: