Gold and silver prices sharply inclined yesterday along with other major commodities, U.S. stock markets while US dollar sharply weakened over major risk currencies such as CAD, EURO and AUD over the renewed optimism in the financial markets over the promise that Merkel and Sarkozy will manage to reach an agreement. I think it’s still premature to assume an agreement between these countries. Currently, gold and silver prices are traded slightly down. Today, Jean Claude Trichet will give a speech, and the Canadian Housing Starts report will be published. Here is a market outlook of precious metals prices for today, October 11th:
Gold and Silver Prices – October Update
Gold price sharply inclined on Monday by 2.14% to $1,670.8; silver price also sharply rose by 3.18% to $31.98. The chart below shows the development of gold and silver prices in October (normalized gold and silver prices (September 30th 2011=100)). During October gold price inclined by 3.0%, and silver prices by 6.3%.
The ratio between gold and silver prices slightly slipped on Monday, October 10th to 52.25. During October, silver price inclined by a larger rate than gold price as the ratio decreased by 3.1%.
On Today’s Agenda:
ECB Press Conference Trichet: Jean Claude Trichet, President of the European Central Bank, talked today in Brussels over the debt crisis and stated that the crisis is systemic and had moved from small countries to large ones. This speech didn’t help the market sentiment and may pull down the Euros to US dollar exchange rate, and consequently also gold and silver prices;
Canadian Housing Starts: The upcoming report is regarding September 2011. In the last report regarding August, the seasonally adjusted housing starts declined compared with July’s rate. This report indicates not only the progress of the Canadian real estate market, but also of the Canadian economy; if the upcoming report will show growth, it may further strengthen the CAD.
US Dollar / Gold & Silver Prices – October
The EURO/US Dollar exchange rate sharply inclined on Monday by 1.97% to reach 1.3642; other currencies also followed and strengthened against the USD including the Canadian dollar and AUD. This sharp move may have helped gold and silver prices rally yesterday. But currently these risky currencies (AUD EURO and CAD) are traded down; if this trend will continue today it could curb the recent rally in the gold and silver prices.
S&P500 / Gold Price – October
The S&P500 index also sharply inclined yesterday by 3.41% to reach 1,194.89; during October the S&P500 index increased by 5.61%. If the stock markets will continue to rally today as they did during the month so far, it may curb the gains in gold and silver prices.
Current Gold and Silver Prices
The precious metals prices are currently traded slightly down in the U.S. markets:
Current gold price short term future (November 2011 delivery) is traded at $1,667.80 per t oz. a $3.0 or 0.18% decrease as of 15:47*.
Current silver price short term future (November 2011 delivery) is at $31.965 per t oz – a $0.015 or 0.05% incline as of 15:48*.
The current ratio of gold to silver prices is at 52.17.
Gold and Silver Prices Outlook:
Gold and silver prices started to pick up due to the weak US dollar, but currently they are already slipping; the shifts in the financial markets in regards to the sentiment over the European debt crisis and its magnitude continues to push the markets in different direction and the bullion markets isn’t different. Despite the shifts in the markets over these speculations I still think that gold and silver prices will continue their rally during this week, even if they will occasionally along the way.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
08:30 – ECB conference Trichet
13:15 – Canadian Housing Starts
Tentative –OPEC monthly report
Tentative –IEA monthly oil report
19:30 – FOMC meeting minutes
15:30 – EIA Report on Crude Oil Stockpiles
19:30 – ECB Conference Trichet Speaks
2:30 – Australia Rate of Unemployment
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