Gold and silver prices outlook for August 2011

Gold and silver prices changed direction in July and rose very sharply, after a slow paced movement during June and May. What were the driving forces behind the recent rally of gold and silver prices during July? Much like the sharp rises that were recorded back in April for gold and silver prices, this time this rally also had less to do with the changes in US dollar or major Stock market indexes and had more to do with the uncertainty in the financial markets and the changes in gold holdings. What is up ahead for gold and silver prices in August 2011? Let’s examine the precious metals market for July and try and to provide an outlook for gold and silver prices for August 2011.

Gold and silver prices July 2011

In July silver price started very slowly and it declined on the first day of the month; afterwards silver price started to pick up very slowly and only from July 13th silver price increased very sharply; gold price, on the hand, didn’t fluctuate as silver price did and rose steadily during July.

By the end of the month, the two precious metals rose in July by 8.5% for gold price and 15.1% for silver price. The last time gold and silver prices had such a sharp rally was back in April when they rose during the month by 8.92% and 28.8%, respectively.

The table below divides the month into two parts with the breaking point at July 12th;, notice that during the first part of July, silver price rose by only 2.3%, while gold price rose by 4%; during the second part of July, silver price rose very sharply by 12.5%, and gold price increased by 4.4% – a similar rate as in the first part of July.

Gold PRICES outlook and Silver prices FORECAST  us dollar euro percent change JULY 2011

 During the first part of July, US dollar appreciated against the Euro, Australian dollar and Canadian dollar, in which the two latter currencies are usually strongly correlated with gold and silver prices; during the second part of the month, the US dollar depreciated against these currencies; this shift is consistent with the shift in the silver price’s movement as it rose very sharply from July 12th while the US dollar weakened. This doesn’t explain, however the growth in gold price.

The chart below shows the changes in gold and silver prices during July, in which the prices were normalized to 100 on June 30th 2011.

Gold prices forecast & silver price outlook 2011 August 3

 The chart shows the sharp rises in silver price from July 12th; gold price is steadily rising during the month.

The chart below presents the changes in the ratio of gold price to silver price (gold price/silver price) during July and the beginning of August; the ratio had a downward trend during the first couple of weeks of July, as silver price has outperformed gold price; but during the last week of July the ratio stabilized at the 40-41 mark; at the beginning of August this ratio started to pick up again as gold price outperformed silver price.

Gold and Silver prices ratio 2011 August 3

 For further reading:

48 comments for “Gold and silver prices outlook for August 2011

  1. Mohammad Salim Pasha
    August 10, 2011 at 8:47 am

    Kindly send the gold price of 2nd.August 2011.

    • August 10, 2011 at 8:51 am

      Hi Mohammad ,

      Acocrding to Bloomberg the gold price was $1644.5 on August 2nd.

  2. Mahesh
    August 10, 2011 at 10:00 am

    Hi Lior,

    Can you please tell me that whether silver price will exceed above 60 0r 61 per gram within this end of the month(August). kindly analyse thoroughly and mail me ASAP.

    Else Kindly explain how will be status of the silver for this month.

    Awaiting for your reply.


    • August 11, 2011 at 1:42 am

      Hi Mahesh,
      If I would to speculate I think its improbable that silver will reach such a high price so soon;
      These are my two cents,

      • ravi
        September 4, 2011 at 2:29 am

        It took the price of silver over 10-20 years to get to $15 an ounce, and only took 2-3 years to double that amount. What does that tell you? As the Sharade that is the US monetary system and the way in which the REAL value of gold and silver has been suppressed, comes to realization and unfolds, you could possibly see another doubling of the value, as we enter into one of the greatest depressions in US history.

        For those who Hold LARGE amounts of gold and silver- over $100,000 worth, the collapse of the dollar will benefit them the most.

  3. Walter Kaplan
    August 10, 2011 at 4:13 pm

    Would appreciate daily updates on gold and silver prices and your forecasts.

    Many tnaks


    • August 11, 2011 at 1:12 am

      Thanks for suggestion Walter, duly noted.

  4. Michael Rempel
    August 11, 2011 at 12:47 am

    If gold outperforms silver (i.e. increases more), gold/silver goes up – the analysis says otherwise (note the peak near July 11 in the 2nd chart corresponding to the dip of silver in the first).

    Also, one or the other (or both) of the charts is inaccurate: = g.orig*g.change; = s.orig*s.change
    chart 2 = = g.orig/s.orig * g.change/s.change
    =~ 44 * g.change/s.change
    therefore, for instance, when gold is above silver in the first chart, the line in the second must be higher than when it started.

    Finally, the charts are misaligned, which makes the relationship between the two charts more unclear.

    • August 11, 2011 at 1:38 am

      Hi Michael,

      Thank you for your comments and corrections, they are much appreciated. I have made the adjustments.

      • Michael Rempel
        August 11, 2011 at 8:17 pm

        Thank you. So the 2nd chart was correct, the different start days just confused me. Sorry if my comments sounded a bit peremptory/smug – that was not my intention.

        Cheers, Michael

        • August 12, 2011 at 1:00 am

          You are right about the chart. The comments were spot on and appreciated. Feel free to comment…

  5. Dilip Phalle
    August 13, 2011 at 2:31 am

    Hello Sir
    I am small investor in Gold
    I want to purchase 200 grm of gold
    At what price i should make purchase?
    Should I buy gold ore silver?

    • August 13, 2011 at 6:43 pm

      Hi Dilip,
      Thanks for your question, but unfortunately I don’t provide finanical advice only general market analysis.

  6. Marcello
    August 15, 2011 at 5:21 pm

    Lior, nice info ….thanks for providing it . If you were to speculate, would you predict metal prices coming back down by the end of 2012 or would you expect them to continue on their slow ascent upwards? Regards,Marcello

    • August 16, 2011 at 2:20 am

      Hi Marcello,
      Thanks for your comment; it’s really hard to make predictions over such a long time span, but if I would to speculate, I think that there is a good chance that gold prices will finish at a higher rate than now. There may be some shifts in directions throughout the rest of the year, but it’s hard (not impossible) to see a scenario that will drive gold prices down at least in the near future. By next year we might see an additional QE program by the Fed, another debt crisis in Europe or even a double dip recession in the US that will further drive gold prices up; on the other hand, there is always a chance (but a small one) of gold prices falling, so you can’t rule out this scenario as well…


  7. Naveed
    August 15, 2011 at 11:06 pm

    what do you see…will gold rise or fall in this week…what are the factors which could affect gold’s rise and fall.

    • August 16, 2011 at 2:11 am

      Hi Naveed,

      Based on the info I currently see, if I would to speculate, I would say gold price will continue to rise throughout the week but at a much gradual pace than last week. In regards to factors that could influence gold prices, you should probably look for the changes in the stock markets (S&P500); the changes in the US treasury bills rates; gold holdings by private trusts and countries and some of the reports that will be published this week I have pointed out in the monthly and weekly outlooks.

      Good Luck,


  8. mohamed zafar
    August 16, 2011 at 12:19 pm

    2day Gold Price per ounce 1779:9 USD woW…….

  9. Tjakra Kembang
    August 17, 2011 at 4:47 am

    Hi Lior, at what figure silver would stand by the end of this month? i would like to know hows your prediction. thank u.

    • August 17, 2011 at 1:51 pm

      Hi Tjakra,
      Thanks for your question. Due to the high volatility in the financial markets it’s hard to make predictions let alone such specific ones; this market showed that sharp changes could occur in a matter of hours… I do think (speculate) that silver price will make a comeback and rise at a slow pace. I prefer not to give an exact number because the high volatility could shift the direction of silver very promptly.
      Good Luck

  10. Cuongnguyen
    August 19, 2011 at 11:29 am

    Hi Lior, gold price reached 1850/ounce today, do you think it remains to raise in the next few days? Could you please tell me your prediction for next week? Thank you so much

    • August 20, 2011 at 11:50 am

      Hi Cuongnguyen,
      Thanks for your comment. If I would to speculate I think gold will continue to rise but at a slower pace…
      (this by no means an investment advice only general market analysis pls see disclaimer)

  11. Gary Andrews
    August 19, 2011 at 11:47 pm

    After seeing the sharp rally in silver today I am concerned whether these prices are rising due to speculations and if it is so will they crash again as they did earlier this year or will they keep on rising in near future?? Would like to know what do u forecast about silver in short and long term.. I am concerned as I have shorted 600 kgs of silver at 39 dollars..

    • August 20, 2011 at 11:46 am

      Hi Gary,
      Thanks for your question.
      I agree with you that the current rally in silver (and gold) is driven, in part, by speculation, and there maybe a correction along the way, but if I would to speculate I don’t think there will be a huge correction unless something substantial will change… the last time there was a very sharp correction in silver (back in May) was stimulated by the CME two margin hikes; so if CME will raise the margins again ( if silver will continue to rise so sharply, it may happen…) there might be a huge correction.

      (this by no means an investment advice only general market analysis pls see disclaimer)

  12. butt
    August 21, 2011 at 10:41 pm

    i sold the gold 1660$ plz tell me it is possible gold price are down what can ido

    • August 22, 2011 at 8:33 pm

      I don’t provide financial advice just general market analysis. I can just say that I think there is a good chance that gold will continue its upward trend in the next several days at least.

  13. puja
    August 22, 2011 at 7:27 pm

    can you tell me gold price in nex lavel in up and what price end of thise month pls

    • August 22, 2011 at 8:40 pm

      Hi Puja,
      Thanks for comment.

      In this market gold price continues to rise, and I still speculate there is a good chance for gold to further rise even if it will be at a slower pace.
      Unless there will be some breaking news (e.g. launch of QE3 , default or debt crisis in another country in Europe etc.) I speculate gold may reach over 2,000 by the end of the month – but again this estimate could change in this highly active financial market.

  14. adina brown
    August 23, 2011 at 5:50 am

    why did the price of gold fall on 3rd of august?

  15. Kwz
    August 24, 2011 at 8:15 am

    hello is it possible that the price for Silver will be in range at 45 by the end of this week? and can you please update me with news of gold and silver thru email?

    Thanks mate 😉

    • August 24, 2011 at 9:34 am

      Anything is possible in this market, but I think/speculate it’s less likely, at least within this week…
      In regards to email you can sign up to my rss by entering your email – it’s located on the mid-left widget.

  16. Alper Turkucu
    August 24, 2011 at 3:20 pm


    Do you predict the price of gold could come down to 1700 usd per ounce.

    I dont want financial advice just wanted to know your prediction.

    • August 24, 2011 at 3:28 pm

      Hi Alper,
      Thanks for your question. Well, it’s hard to say in this highly uncertain times however I speculate there is little chance for gold falling so sharply in August; (and in the mean time gold is crashing in today’s trading….Aug 24) the chances may rise coming September, but still the best bet will probably be that gold will rise in a slower pace than before.

      • Tjakra Kembang
        August 24, 2011 at 4:21 pm

        How about Silver performance for this coming september? your insight please. thanks

      • Alper Turkucu
        August 24, 2011 at 5:24 pm

        Gold went down to 1779 usd. I am expecting it go down to 1720 usd.

        • Alper Turkucu
          August 25, 2011 at 12:23 pm

          told you so

          • August 25, 2011 at 1:22 pm

            Yup, you were right. the CME margin hike was probably one of driving forces for the sharp fall.

  17. David S
    August 24, 2011 at 6:42 pm

    With Silver having been so manipulated for such a long time at the CBT and now that we can hope for a free market moving forward what can we expect a target price will be? That said, hasn’t silver and gold had a percentage trading relationship in the past? Moving into the future do you see that relationship breaking off? I own a bunch of silver (eagle sets X 10, 200 morgan dollars and 200 peace dollars as well as proof and mint sets from the 1950’s to this years (some in multiples. That said ALL are past melt value, ( even the graded MS69 by NGC Eagles ) How long do I hold on to it all? I was thinking of a target price of $75 per. oz.

    • August 24, 2011 at 7:02 pm

      Hi David,
      Thanks for your comment.
      I can’t suggest you what to do, only porvdie general market analysis….that being said, gold and silver are usually highly correlated as you can see in the following link. but during August gold jumped much higher than silver resulting in the correlation between the two to decline. I think the correlation will eventually level out, but again as you said it’s not stable. in regards to silver target price, it’s very hard to say at this time, it might reach $75 but it’s not likely (yet possible) to reach such a high rate in the near future.

  18. Azmat Ali
    August 25, 2011 at 8:30 am

    hi, i am azmat i want to ask that will there be rise in gold and silver price or it will descreased in september tell me quickly plez i am waiting for ur answer

    • August 25, 2011 at 1:25 pm

      Hi Azmat,
      It’s hard to say at this stage, we will need to wait for tomorrow and Bernanke’s speech.

  19. Mahmood
    August 25, 2011 at 2:14 pm

    from last two days silver prices are going down at very sharp rate , similarly gold prices are going down , is there any reason for that , whats your speculation in near future about gold and silver

  20. vandan
    August 25, 2011 at 4:32 pm


    Gold will drop below $1690 on 25 Aug. Is there anyone have same prediction?

  21. Amardeep
    August 27, 2011 at 10:26 pm

    hi Lior,
    was just surfing today about gold silver predictions and found ur website quite useful and ur quick reply too beneficial,I appreciate.

    I bought Gold 500gm @ $1880 on 22 Aug have been waiting since as being a newbee i don have much calculation or understanding.Would really admire ur guidance on same

    As well i bought silver same day 15kg @ 44(Approx) i told u i m newbee plz guide something what to do either retain or sell

    • August 28, 2011 at 12:16 pm

      Hi Amardeep,
      Thanks for your comment and I wish you success in your trading, unfortunately I do not provide financial advice just general market analysis (you can see herein the complete disclaimer for this site).
      I will publish by the beginning of next week a monthly analysis and outlook on gold and silver that might benefit you as general market analysis.

      Good Luck,


      • Amardeep
        August 28, 2011 at 2:09 pm

        Hi Lior,
        Thanx for your reply.So sorry if i wrote smthing wrong,I just needed an expert’s analysis and comments in regard to gold and silver.


  22. bob
    September 6, 2011 at 6:09 am

    Hi Lior,

    For the month of Sept, whats your speculation in the coming weeks of Sept on gold. Will there be any price drops?

    • September 6, 2011 at 8:34 am

      Hi Bob,
      I still think there will be an upward trend for gold price during most of September, but not in the same steep increase as in August. Sure there will probably be corrections along the way, as there always are (perhaps around the next FOMC meeting if there will be no news of a stimulus plan).
      You can see for further details on my recent monthly report for September

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