Gold and silver prices rose yesterday, as they did throughout during recent days but they are currently traded sharply down following Ben Bernanke’s speech from yesterday.
Let’s examine the news of the day related to the precious metals market for today June 23rd:
Gold and silver prices – June
Silver price also inclined yesterday 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 (January 3rd 2011=100).
The chart shows that silver price outperformed gold price during most of 2011and reached a peak by the end of April.
The chart above is misleading and one might assume that during 2011 gold price didn’t rise. The gold price chart below refutes this assumption, and followed the sharp fall of gold price at the beginning of 2011; gold price has been rising and demonstrating an upward trend.
The gold to silver ratio: As of Wednesday, June 22nd the ratio between gold and silver prices continue to hover near the 43-42 mark; yesterday it declined to 42.26; during June this ratio inclined by 5.3%, which means that during June gold price has outperformed silver price.
Federal Reserve’s rate decision
As expected, the Fed kept the basic interest rate unchanged between 0 and 0.25%. This rate remained unchanged for the past couple of years.
The Fed also updated the US GDP growth rate to 2.7-2.9 after it was 3.1-3.3% in the April forecast.
There was still no sign of a new QE/ stimulus plan in Ben Bernanke’s speech; this might keep US dollar strong compared with major currencies.
Current Gold and Silver prices
The precious metals prices are currently traded sharply down in the U.S. markets:
The current gold price, short term futures (July 2011 delivery) is traded at $1,540.7 per t oz. with a $31.6 decrease or 2.03% as of 14:52*.
Current silver price, short term futures is at $35.250 per t oz – a $1.504 decline or 4.09%, as of 14:52*.
The current ratio of gold to silver prices is at 43.68.
Gold and silver prices Outlook:
Gold and silver prices are currently falling down after they moderately rose during recent weeks. The speculation around the future steps the Fed will take in order to stimulate the US economy has subsided for now after Bernanke’s speech from yesterday. This is probably among the reasons for the current strong US dollar and consequently the cause gold and silver prices are trading down.
That being said, I still speculate that in the mid term gold and silver prices will rise, because I don’t think the Fed will remain idly by while the US economy is slowing down. If a new plan will be presented in the next few months this might shift down the US dollar and push up gold and sliver 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 and tomorrow (all times GMT):
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
13:30 – US Department of Commerce – Report on Durable Goods
13:30 – US GDP 1Q 2011 report
For further reading: