Gold & Silver Prices – Daily Outlook 6 July

Gold and silver prices continue to zigzag and they bounced back and rose very sharply yesterday. Gold and silver prices are currently traded up with moderate rises. Today, the major reports to be published include: European GDP, ISM Non-Manufacturing report, German factory orders and Australian employment report

Let’s examine the news of the day related to the precious metals market for today July 6th:

 Gold and silver prices – June/July

Gold price continue to zigzag as it bounced back and sharply inclined on Tuesday, July 5th by 2.03% to $1,512 – its highest price level since June 23rd.


Silver price also sharply inclined yesterday by 5.06% to $35.41 – the highest price since June 22nd.

During July, gold price increased by 0.7%, and silver price inclined by 1.7%.

The chart below shows the normalized gold and silver prices (January 3rd 2011=100). It shows, that despite the falls in gold and silver prices in recent months, gold price rose during 2011 by 6.31% and silver price by 13.77%.


Gold prices forecast & silver price outlook 2011 JULY 6

 The gold to silver ratio: As of Tuesday, July 5th the ratio between gold and silver prices remained around the 43 mark as it fell to 42.72; during July this ratio declined by 1%, which means that during July (up to now) silver price has outperformed gold price.


Gold prices forecast & silver price outlook ratio 2011 JULY 6

 US Dollar and Gold and silver prices – July update

The US dollar appreciated yesterday against major currencies including Euro and AUD.

In recent news, Moody’s downgraded Portugal’s debt from Baa1 to Ba2. This news rekindles the concerns over not only Greece but also Portugal.  Some speculate that these concerns are among the reasons for the rises in gold and silver prices and the depreciated of the Euro.

The problem with this theory is that historically, the Euros to US dollar was positively correlated with gold and silver prices; another problem is that the Euros to US dollar traded down yesterday very moderately, while gold and silver prices rose very sharply. Nonetheless, there might be some merit for this theory, but there could be other factors that affected gold and silver prices.

The recent rises might have something to do with a speculative move: whenever gold price reached a low level in a given month, it usually inclined the following day. E.g. during June gold price reached its lowest at $1,496 on June 27th, the following two days gold price inclined. I will further explore this issue in a future post.

Current Gold and Silver prices

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

The current gold price, short term futures (August 2011 delivery) is traded at $1,518.1 per t oz. with a $5.4 increase or 0.36% as of 07:32*.

Current silver price, short term futures is at $35.89 per t oz – a $0.48 incline or 1.36%, as of 07:34*.

The current ratio of gold to silver prices is at 42.29.

(* GMT)

Gold and silver prices Outlook:

 Gold and silver prices started July with sharp falls and then followed with a sharp correction; the recent news from Europe regarding Greece and Portugal will continue to affect the bullion market, but all eyes will look towards tomorrow and the ECB rate decision, which may have a strong impact on the Euro/USD and also gold prices.

I still speculate that in the short term gold prices will remain near $1,500 and silver price around $33-35.  

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


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


13:30 – ECB conference Trichet speaks and Euro rate decision

13:30 – Department of Labor report – U.S. unemployment claims

15:30 – EIA report about Crude oil inventories


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