Gold and silver prices rallied from Wednesday’s tumble and ended Thursday in the green. Currently however gold and silver are traded slightly down. Yesterday’s U.S published reports including the decline in U.S. Jobless Claims to 351k, the rise in U.S. PPI by 0.4% in February, and the rise in the Philly Fed Manufacturing Index to +12.5, may have some lingering effect during today’s trading. Today the U.S. CPI will be published.
Here is a short analysis on gold and silver prices for Friday, March 16th:
Gold and Silver– March Update
Gold price bounced back on Thursday by 1.01% to $1,659.5; silver also rallied by 1.69% to $32.73. During March, gold declined by 3.03% and silver by 5.53%.
The chart below shows the recent decline in gold and silver during March (prices are normalized to February 29th).
The ratio between gold and silver continue to zigzag and reached 50.71. During the month the ratio rose by 2.65% as gold has outperformed silver. In the chart below are the changes of this ratio during the month.
On Today’s Agenda
U.S Core Consumer Price Index: This report will show the changes in the core CPI for February 2012. According to the U.S Bureau of Labor statistics in January 2012, the core CPI slightly rose by 0.20% (M-o-M) and also increased over the last 12 months by 2.3%; this news may affect the strengthen of the U.S dollar and consequently bullion prices. The recent U.S PPI that showed a rise of 0.2% (sans energy and food) may indicate the core CPI monthly report will also show a rise in core inflation.
Forex / Gold & Silver Market – March
The Euro/U.S Dollar also rallied on Thursday to 1.3080. During March Euro/U.S Dollar decreased by 1.84%; further, the Australian dollar and Canadian dollar also appreciated against the U.S. dollar by 0.69% and 0.08%, respectively. Since these currencies pairs are linked with the daily shifts in gold and silver prices if these currencies will appreciate against the U.S dollar it may indicate gold and silver will also trade up. Currently, the Euro/USD is rising.
American Stock Markets / Gold & Silver Prices – March
The S&P500 index slightly rose on Thursday by 0.6% to 1,402.6. During the month S&P500 index traded up by 2.7%. As presented in the chart below, the S&P500 index continues to be strongly and positively correlated with gold and silver prices (during March the linear correlation was 0.571 with gold and 0.662 with silver), even though metals seem to have taken a different direction than the S&P500 has in recent week. Nonetheless, if the stock market will continue to trade up it may indicate that gold and silver prices could make a comeback.
Current Gold and Silver Prices March 16th
Gold (April 2012 delivery) is traded at $1,652.0 per t oz. a $7.5 or 0.45% decrease as of 10:43*.
Silver (April 2012 delivery) is at $32.45 per t oz – a $0.276 or 0.84% decrease as of 10:43*.
(* GMT)
Gold and Silver Daily Forecast and Analysis
Bullion prices managed to rally on Thursday following the sharp drop they have had a day earlier. This rally may have just been a correction to the sharp fall on Wednesday or a speculative move of traders to buy in the now cheap gold and silver. The positive news from the U.S regarding manufacturing conditions (Philly Fed) and U.S unemployment (jobless claims) didn’t affect much the markets especially after the positive endorsement of the FOMC earlier this week in the U.S economy. Only a very positive and unexpected news regarding the U.S. economy may eclipse that endorsement. The U.S PPI may continue to have some lingering effects on the U.S dollar and consequently gold and silver prices. Finally, the U.S CPI may also affect the dollar.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Today
15:30 –U.S Core Consumer Price Index
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