Let’s examine the news and events that might affect current gold and silver prices as of April 6th:
China raised its interest rate
Bank of China raise its basic interest rate by 25 basis points to 6.31%. This is the second interest rate raise this year. This decision was taken to slow down China’s growing inflation, which as of February 2011 reached 4.9% annual rate.
China is the second largest consumer of gold after India; China’s jewellery demand reached a new annual record of 400 tons, and its annual demand for bars and coins totaled 179.9 tons – an increase of 70% (Y-2-Y).
The recent rise in interest rate might adversely affect its demand for precious metals, such as gold and silver. If it will have such an affect, it will be felt in the upcoming months.
Turmoil in Middle East – update
The fights between the rebels and Gaddafi’s army progresses and even with NATO’s intervention the fights don’t subside.
This turmoil raises the instability in the Middle East and adversely affects the market of commodities and precious metals.
Gold and silver prices April 2011
The month of April started off with rises for gold and silver prices. During March silver prices rose by over 10% while gold prices didn’t do much.
In the chart below are the changes of gold prices during 2011; the chart shows that gold prices bounced back from its decline during January.
The gold to silver ratio: as of yesterday, April 5th the ratio between gold and silver prices declined to 37.07 – the lowest level this month so far.
As seen in the graph below, the ratio of gold to silver prices continue to drop as silver prices increase by a higher rate than gold prices do.
Current Gold and Silver prices
US markets show major precious metals prices moderately rising:
The current gold price, short term futures (May 2011 delivery) is traded at 1,458.1 USD / t oz. a 5.6$ increase or 0.39%, as of 10.56*.
Current silver price, short term futures is at 39.37 USD / t oz – a 0.187 increase or a 0.48%, as of 10.56*.
The current ratio of gold to silver prices is at 37.72.
Gold and silver prices Outlook and Analysis:
The recent decision of China to raise its interest rate, might adversely affect the precious metals market, and might curb the rally of gold and silver prices. This affect, however, might only be seen in the future, if this decision will affect China’s demand for commodities.
In the mean time, I still speculate that gold prices will continue to moderately rise as the week will progress. The same goes for silver prices.
Here is a reminder of the top news and reports that are published today and tomorrow (all times GMT):
14.30 – Australian Bureau of Stat. will publish the unemployment rate
15.30 – EIA report about Crude oil inventories
13.30 – Department of Labor report – US unemployment claims
13.30 – ECB president’s speech
15.30 – EIA report about Natural gas storage
For further reading (in this site):
- Crude oil prices Monthly outlook –April 2011
- Weekly outlook for April 4-8
- Gold Prices Outlook for 2011 and Analysis of 2010
- Gold prices outlook for April 2011 – what’s next for gold?