Gold price keeps on moderately changing with no clear trend, while silver prices might be starting a new downward trend. The disappointing results in the recent U.S. labor report might stir the commodities markets. Let’s analyze the precious metals market for today, June 3rd:
Gold and silver prices – June
Gold price keeps on seeking a direction as it fell yesterday by 0.68% and reached $1,532.
Silver price kept on falling and declined by 3.96% to $36.20.
During June, gold price decreased by 0.3%, while silver price declined by 5.5%.
The chart below presents the normalized silver and gold prices (May 2nd 2011=100): it shows the recent decline in silver prices that started at the beginning of June; gold price keeps on fluctuating with no clear direction.
The gold to silver ratio: As of Thursday, June 2nd the ratio between gold and silver prices inclined to 42.34 – the highest rate since May 23rd, 2011. The recent drop in silver price compared to gold price is driving this ratio up.
The chart below shows the recent changes of this ratio in the last few months in 2011.
US Dollar and Gold and silver prices – June
As seen in the recent gold and silver prices monthly analysis report on for May, the daily percent changes of US dollar compared with other major currencies are positively correlated with daily percent changes of crude oil prices, mainly AUD/USD and USD/CAD.
Yesterday, Thursday June 1st, the US dollar weakened against major currencies including EURO, Canadian dollar and AUD by 1.13%, 0.15% and 0.52%, respectively.
The weakening of the US dollar yesterday doesn’t seem to coincide with the decline of gold and silver prices yesterday, based on the correlations presented in the monthly analysis. It might be that there were other factors that affected the direction of gold and silver prices yesterday.
Gold and silver prices and S&P500- June
During May there was also a strong positive linear correlation between precious metals daily percent change and S&P500 index daily percent changes.
Yesterday, the S&P500 index declined by 0.12% compared with the previous day. This change coincides with the decline of gold and silver prices.
That being said, these abovementioned correlations and relations might also be just noise, especially since these daily percent changes are very moderate. It’s easier to see a link when these indexes fluctuate by a high rate.
U.S. Labor Report
Labor report – today the U.S. labor report was published and it didn’t show good news as only 54,000 jobs were created during May, despite market expectations of nearly three times as much. This report might affect the strength of US dollar and consequently gold and silver prices.
Current Gold and Silver prices
Major precious metals prices are traded with mixed trends in the US markets:
The current gold price, short term futures (July 2011 delivery) is traded at $1,541.2 per t oz. a $8.5 increase or 0.55%, as of 16:44*.
Current silver price, short term futures is at $35.75 per t oz – a $0.452 decline or 1.25%, as of 16:44*.
The current ratio of gold to silver prices is at 43.10.
(* GMT)
Gold and silver prices Outlook and Analysis:
Gold price continues to seek a direction as it continues to maintain at its current level of $1,500.
Silver price on the other hand might be on the verge of another downward trend, at least for now it’s currently traded down.
The disappointing results in the recently published U.S. employment report indicates that the US economy isn’t progressing out of its recession at the same rate as it did at the beginning of 2011. This news might further push down the US dollar compared with major currencies; this might also affect gold and silver prices and push them up a bit.
Nonetheless, I still think that gold and silver prices will maintain their current price level until a new development will occur in the financial markets such as a news stimulus plan of the Fed that will further weaken the US dollar.
Here is a reminder of the top events and reports that are planed for today (all times GMT):
Today
13.30 – US unemployment rate report & non-farm employment change
15.00 – U.S. ISM Non-Manufacturing PMI
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For further reading (in this site):
- Gold and silver prices outlook for June 2011
- Weekly outlook for May 23-27
- Gold and Silver ended the week rising – weekly recap 16-20 May
- Gold and silver prices outlook May 2011
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