Gold and silver prices sharply increased yesterday and thus are about to complete one of their best performing weeks in February. Currently gold and silver prices are declining. Today, the U.S. new home sales report will be published and the revised Great Britain GDP for the fourth quarter of 2011.
Here is a short analysis for metals market and a review of the main news items and events related to gold and silver for Friday, February 24th:
Gold and Silver– February Update
Gold price increased on Thursday by 0.85% to $1,786.3; silver also sharply increased by 3.81% to $35.64. During February, gold rose by 2.64% and silver by 7.14%.
The chart below presents the developments of gold and silver during the month (prices are normalized to January 31st).
The ratio between gold and silver sharply fell on Thursday, February 22nd and reached 50.13. During February the ratio declined by 4.2% as silver has moderately outperformed gold. In the chart below are the changes in this ratio during February.
During recent months there has been a decline in the volatility of gold and silver prices as their standard deviations have decreased; as of February they have reached their lowest level in recent months.
U.S. New Home Sales: in the last report (for December 2011), the sales of new homes rose by 2.2% and reached an annual rate of 307,000; if the number of home sales will rise again in the upcoming report, it may further indicate a rally in the U.S real estate market which may also adversely affect gold and silver prices via the US dollar.
Great Britain GDP Q4 2011: according to the preliminary estimate the fourth quarter contracted by 0.2 %( Q-2-Q); if this report will be much different than the preliminary estimate it might affect the GBP;
Forex / Gold & Silver Market – February
The Euro/U.S Dollar sharply rose on Thursday by 0.94% to 1.3373. During February Euro/U.S Dollar increased by 2.22%; furthermore, the Aussie dollar and Canadian dollar also appreciated against the U.S. dollar by 0.74% and 0.23%, respectively. The correlations among Aussie dollar, CAD, Euro and precious metals prices are still strong (the linear correlation between the Euro/USD and gold price is 0.36). Therefore, if the Euro, Aussie dollar and CAD will resume their rally; this could indicate that gold and silver prices will continue their trade up. Currently, the Euro/USD is slightly increasing.
Current Gold and Silver Prices February 24th
Gold (March 2012 delivery) is traded at $1,777.5 per t oz. a $8.8 or 0.49% decrease as of 06:31*.
Silver (March 2012 delivery) is at $35.38 per t oz – a $0.256 or 0.72% decrease as of 06:31*.
Gold and Silver Daily Outlook
Gold and silver prices resumed their upward trend of recent days and sharply increased along with other commodities prices and major currencies against the US dollar. The upcoming U.S. new home sales report and GB revised GDP for the fourth quarter might affect forex traders, which in turn, may affect the direction of bullion prices.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
09:30 – GB revised GDP Q4 2011
15:00 – U.S. New Home Sales
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