Gold and silver prices started July with sharp falls, but they are currently traded up. Today, the full US durable good report will be published.
Let’s examine the news of the day related to the precious metals market for today July 5th:
Gold and silver prices – June/July
Silver price also declined on Friday by 3.24% to $33.71.
During June, gold price decreased by 2.2%, and silver price declined by 9.1%.
The chart below shows the normalized gold and silver prices (May 31st 2011=100).
The gold to silver ratio: As of Friday, July 1st the ratio between gold and silver prices continued to remain around the 43 mark as it reached 43.99; during June this ratio inclined by 7.5%, which means that during June gold price has outperformed silver price.
US Dollar and Gold and silver prices – July update
The US dollar is currently depreciated against the Euro, following the approval of the EU’s approval of the Greek aid over the weekend. If this trend will continue today, this might also affect gold and silver prices to trade up. Nonetheless, since the Euros to US dollar is traded down very moderately, its effect on gold and silver prices might be little.
US Manufacturing Shipments and Orders
Today, the US Department of Commerce will issue its full May 2011 report about the Manufacturing Shipments and Orders; this report is a good signal for the changes in the investment and production in the US; in the advance report of May 2011, the new orders manufacturing goods rose by $3.6 billion or 1.9% to $195.6 billion. If the upcoming report will continue to show an improvement, this might signal the US economy’s recovery from its slowdown.
This report was suggested to affect the US treasury bonds yields according to Balduzzi, Elton, and Green (2001); if this will be the case, it might also have an indirect effect on gold and silver prices.
Current Gold and Silver prices
The precious metals prices are currently traded up in the European markets:
The current gold price, short term futures (August 2011 delivery) is traded at $1,497.2 per t oz. with a $14.6 increase or 0.98% as of 10:02*.
Current silver price, short term futures is at $34.085 per t oz – a $0.38 incline or 1.13%, as of 10:03*.
The current ratio of gold to silver prices is at 43.92.
Gold and silver prices Outlook:
Gold and silver prices started July with sharp falls, but are currently traded up; one of the key factors will remain the USD effect on bullion metals prices’; the recent news from Europe in which the Greek crisis is averted (for now) might be among the reasons for the current depreciation of the US dollar and consequently the rise in gold and silver prices.
I still speculate that in the short term gold prices will remain near the $1,500 mark and silver price around the $33-35 mark, but in the following weeks we might continue to see gold and silver prices losing some of their value.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
5:30 – Reserve Bank of Australia – rate decisions
15:00 – U.S. Department of Commerce – US Manufacturing Shipments and Orders
10:00 – Final GDP of Q1 of European Union
11:00 – German Factory Orders
15:00 – ISM Non-Manufacturing PMI
2:30 – Australian employment report
For further reading: