Let’s examine the mains news that might affect the changes in the current gold and silver prices as of March 16th:
Turmoil in the Middle East
Qaddafi continues his air strike on the rebels’ dwellings. Now, it’s reported that he aims towards Benghazi as his forces progressed into the gateway city of Ajdabiya, 160 km from the rebels’ capital.
Up to now there isn’t any progress with the implementation of the no-fly zone by NATO, as the UN didn’t approve it so far.
There are also protests in Bahrain despite that Saudi Arabia sent there its troops in an attempt to stabiles the region. There are reports that the police opened fire on protestors in the village of Sitra yesterday; and there were additional violent confrontations between the police and protestors in the Capital of Bahrain – Manama.
Japan’s tsunami attack ramifications
The adverse ramifications from the tsunami attack keeps on befalling on Japan. Earlier this morning there were reports of a 6.0 Earthquake at the East coast of Japan, and people also fell the quake in Tokyo.
The Nuclear Reactor in Fukushima, located 240 km north of Tokyo suffered a fourth explosion, with a partial meltdown; however the recent news is that the radioactive levels in the region are falling.
Current Gold and Silver prices
European markets currently start off with rises in major precious metals prices:
The current gold prices, short term futures (April 2011 delivery) are traded at 1,401.1 USD / t oz. an 8.3 incline or a 0.6%, as of 9.07*.
The current silver prices, short term futures are at 34.39 USD / t oz – a 0.273 increase or a 0.8%, as of 9.07*.
Gold and silver prices Outlook and Analysis:
Yesterday, the market closed with sharp falls across the boarder. This could be because the trade in Asia decreased substantially, since Tokyo – one of the financial capitals in the world and in the Far East in particular, is in the middle of the current turmoil in Japan. Yesterday, the Nikkei 225 stock index fell by 10.6% – the worst day it had since October 2008.
The turmoil in Japan will continue to adversely affect the financial markets with fewer trades and higher volatility as the uncertainty in the region keeps on rising. The same could be attributed to the news from the Middle East.
Japan is a major player in the gold market: it has over 765 tonnes of gold as of January 2011 – the eighth largest worldwide.
The BOJ (bank of Japan) also might have contributed to the rise of gold prices due to its quantitative easing policy in recent year to stimulate the economy and as a result also contributed to the devalue of the Japanese yen.
This means that Japan has a major role in the financial market in general and in the gold market in particular, and the instability in the markets will continue with no clear trend in the next few days.
I speculate that gold and silver prices might moderately bounce back from yesterday’s sharp declines as the day will progress as the volatility will keep on being high.
The gold to silver ratio: as of yesterday, March 15th the ratio between gold and silver prices reached 40.82; the ratio has been declining during March, as silver prices rose much more precipitately than gold prices. It will remain to be seen if this trend will continue.
Here is a reminder of the top news and reports that are planed for today and tomorrow that might influence the markets (all times GMT):
10:00AM– Euro Area core monthly inflation (February)
16.30PM – EIA report about Crude oil inventories
13.30PM – Department of Labor report – US unemployment claims
13.30PM – Report on US CPI
15.30PM – EIA report about Natural gas storage
For further reading (in this site):
- Gold prices bounce back in February – what will be next?
- Gold & Silver Prices zigzagged all week – weekly recap 7-11 March
- Gold Prices Outlook for 2011 and Analysis of 2010