Gold and silver prices continue to crawl up at a slow pace. Today the Fed will decide the basic interest rate.
Let’s examine the news of the day related to the precious metals market for today June 22nd:
Gold and silver prices – June
Silver price also inclined on Tuesday by 0.85% to $36.38.
During June, gold price increased by 0.6%, but silver price declined by 5.0%.
The chart below shows the normalized gold and silver prices (May 31st 2011=100).
The gold to silver ratio: As of Tuesday, June 21st the ratio between gold and silver prices continue to hover near the 43 mark as it dropped yesterday to 42.51; during June this ratio inclined by 6.0%, which means that gold price has outperformed silver price during June.
Federal Reserve’s rate decision
Today, the Fed will announce its rate decision. The current rate is ranged between 0 and 0.25%. This rate has remained at its current rate for over two years. The decline in the US inflation rate as presented below indicates the inflationary pressures are subsiding due, in part, to the decline in gasoline prices in recent weeks. This news is likely to keep interest rates at their current low level and, all things being equal, also keep the US dollar low.
There are also speculations around the next move of the Fed in regards to a new stimulus plan, this might also affect the strength of the US dollar and as a result also affect 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 (July 2011 delivery) is traded at $1,553.7 per t oz. with a $7.3 increase or 0.47% as of 14:55*.
Current silver price, short term futures is at $36.55 per t oz – a $0.171 incline or 0.47%, as of 14:54*.
The current ratio of gold to silver prices is at 42.50.
Gold and silver prices Outlook:
Gold and silver prices continue to crawl up after they declined at the beginning of the month.
I still think that in the mid term gold and silver prices will continue to incline.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
15:30 – EIA report about Crude oil inventories
17:30 – Decision on Federal Reverse’s Interest Rate
13:30 – Department of Labor report – U.S. unemployment claims
15:00 – U.S. new home sales
15:30 – EIA report about Natural gas storage
For further reading: