Gold and silver prices continue to demonstrate a slow recovery from the falls they had at the beginning of the month. The recent rise in USD compared with major currencies especially EURO didn’t seem to have much of an effect on gold and silver prices as it did on energy commodities prices mainly crude oil prices. Let’s examine the news of the day and analyze the precious metals market for June 16th:
Gold and silver prices – June
Silver price didn’t’ change and remained at $35.41.
During June, gold price decreased by 0.7%, while silver price declined by 7.6%.
The chart below shows the normalized gold and silver prices (May 31st 2011=100).
The ongoing concerns in Europe in regards to the Greek debt are probably among the reasons for the very sharp fall in Euro/USD exchange rate. There is still evidence to support the effect of the major currencies on the daily percent changes of gold and silver prices.
The gold to silver ratio: As of Wednesday, June 15th the ratio between gold and silver prices inclined to 43.1, and during June this ratio inclined by 7.3%.
The chart below shows the fluctuations of this ratio in recent months:
Today, the Euro Area consumer price index was published and showed the inflation rate moderately declined from 2.8% during April to 2.7% to 2.7%. This is still a higher than the targeted inflation rate for 2011 of the ECB. This may further weaken the Euro, but could also influence ECB to raise its basic interest rate. Currently, this news doesn’t seem to affect gold and silver prices.
Current Gold and Silver prices
The precious metals prices are currently traded with little changes in the European markets:
The current gold price, short term futures (July 2011 delivery) is traded at $1,526.2 per t oz. with no change as of 15:30*.
Current silver price, short term futures is at $35.365 per t oz – a $0.045 decline or 0.13%, as of 15:31*.
The current ratio of gold to silver prices is at 43.15.
Gold and silver prices Outlook and Analysis:
Gold and silver prices continue to seek direction and stagnate at their current level.
I still speculate that in the mid term gold and silver prices will rise, and will commence once there will be some breaking news from the U.S. (e.g. an additional stimulus plan by Federal Reserve).
The news from Europe as listed above, could contribute to the gains of gold and silver prices.
In the meantime it seems that gold and silver prices will moderately change, but will remain near their current price level.
Here is a reminder of the top events and reports that are planed for today(all times GMT):
10:00 – Euro Area CPI and core monthly inflation (May)
13:30 – U.S. Building Permits
13:30 – Department of Labor report – U.S. unemployment claims
15:30 – EIA report about Natural gas storage
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