Gold & Silver Prices – Daily Outlook October 21

Gold and silver prices sharply fell yesterday and thus gold price completed four days of falls. Currently gold and silver prices are traded up. Today, there will be an ECB Press Conference in which Trichet will speak; the German Business Climate Survey will be published, and the Canadian Core CPI.

Here is a market outlook of precious metals prices for today, October 21st:

Gold and Silver Prices – October Update

Gold price sharply declined on Thursday by 2.07% to $1,612.9; silver price also sharply fell by 3.18% to $30.28. The chart below presents the changes in gold and silver prices during the month (normalized gold and silver prices (September 30th 2011=100)). During October, gold price declined by 0.6%, and silver prices by 0.7%.

Gold price forecast & silver prices outlook 2011 October 21

The ratio between gold and silver prices slightly inclined on Thursday, October 20th to 53.26. During October, silver price inclined by a slightly larger rate than gold price as the ratio slipped by 1.2%.

Ratio Gold price forecast & silver prices outlook 2011 October 21

Gold and silver prices continue to move in the same direction as their linear correlation remains high and positive.

Correlation Gold price outlook & Silver Prices April October  2011 October 21 2011

On Today’s Agenda:

ECB Press Conference Trichet Speaks: Jean Claude Trichet, President of the European Central Bank, will talk about the challenges of European leaders in resolving the debt crisis;

German Business Climate Survey: This survey estimates the changes in the business climate in Germany on a monthly basis. In the last report for September, the business climate index declined again; this survey may affect commodities traders;

Canadian Core CPI: This report will refer to the core consumer price index changes during September 2011 that controls the volatile components such as energy, fruit and vegetables. In the previous report, the CPI increased by 3.1% during the past 12 month up to August. This news may affect the CAD currency.

 Update on European Debt Crisis

Some speculate that the recent slump in commodities including gold and silver is driven by liquidity problem many European banks are facing as they trade their holdings in precious metals to boost their capital buffer. If this analysis has a grain of truth, it may partially explain the recent drop in commodities prices and could also have additional ramifications in the short term. All eyes are still looking towards next week’s Euro summit on October 23rd. There are reports that the Germans and French officials asked for additional time to seal an accord. There is also a report of an additional summit to be held on October 26th.

U.S Existing Home Sales Declined in September

 Yesterday we were informed that the annual rate of U.S existing home sales declined by 3% in September as the seasonally adjusted annual rate reached 4.91 million home sales in September.

Philly Fed  Index Improved in October

The Philly Fed Manufacturing Index inclined from -17.5 in September to +8.7 in October. The new orders index also gained 19 points and returned to positive territory.

This news may have pushed gold and silver prices down as the signs of recovery eased some of the uncertainty in the financial markets regarding the progress of the U.S. economy.


U.S Dollar / Gold & Silver Prices – October

The AUD to U.S Dollar exchange rate slightly inclined on Thursday by 0.49% to reach 1.0155; other currencies also were traded up against the USD including CAD, CHF and Euro. If the “risk currencies” (AUD, Euro and CAD) will rise today, they might curb the recent falls in gold and silver prices.

Current Gold and Silver Prices

The precious metals prices are currently traded up in the European markets:

Current gold price short term future (November 2011 delivery) is traded at $1,623. 0 per t oz. a $10.10 or 0.63 % increase as of 11:07*.

Current silver price short term future (November 2011 delivery) is at $30.645 per t oz – a $0.364 or 1.2% incline as of 11:09*.

The current ratio of gold to silver prices is at 53.45.

(* GMT)

Gold and Silver Prices Outlook:

Gold and silver prices sharply fell yesterday; gold price declined all through the week even though it was traded up in the first couple of weeks of October. The recent improvement in the Philly Fed may have helped to push gold and silver prices down while moderately gaining back of the losses in the American stock markets in recent days. But the speculation around the European debt crisis will continue to be the eight hundred pound gorilla affecting the financial markets including precious metals.

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


08:40 – ECB Press Conference Trichet Speaks

09:00 – German Business Climate Survey

13:00 – Canadian Core CPI

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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.