Gold & Silver Prices Outlook – 11 April

Let’s examine the news and events that might affect current gold and silver prices as of April 11th:

War in Libya – will there be a ceasefire?

There is a suggested ceasefire, which was made by the Africa Union, between the rebels and Gaddafi’s forces; the guidelines were claimed to be acceptable by the Gaddafi, however not by the rebels. It will remain to be seen if this attempt will manage to bring to an end this fighting in Libya.

See here for a more detailed update on Libya and its affect on commodities’ markets.

Gold and silver prices April 2011

April continues the rally of precious metals prices that progressed during March. In the chart below are the changes of gold and silver prices during March and April 2011 as the prices are normalized to 100=Jan 3rd 2011; the chart shows how silver prices started to outperform gold prices since mid February 2011.


Gold and Silver prices normalized Jan 2011 up to April 11

As of April 8th, Silver price has risen by 7.62%, while gold price increased by 3.16%.

The gold to silver ratio: on Friday, April 8th the ratio between gold and silver prices declined to 36.30 – its lowest level in 2011.

As seen in the chart below, the gold to silver prices ratio keeps on falling because silver price is outperforming gold price.


Gold and Silver prices ratio 2011 April 11

The correlation of gold and silver prices (daily percent changes) has been fluctuating through 2011; however remained well over 60%. In fact, during February the correlation declined to 0.64, but then it bounced back in March to 0.87. Currently, the correlation between the two prices is at 0.8.


Correlation of Silver and Gold Prices  Dec 2010- April 8 2011

Current Gold and Silver prices

European markets show major precious metals prices are traded at mixed trend:

The current gold price, short term futures (May 2011 delivery) is traded at 1,467.6 USD / t oz. a 6.5$ decrease or 0.44%, as of 11.29*.

Current silver price, short term futures is at 41.1 USD / t oz – a 0.492 increase or 1.21%, as of 11.27*.

(* GMT)

The current ratio of gold to silver prices is at 35.7.

Gold and silver prices Outlook and Analysis:

Gold and silver prices finished last week with high rises; This rally may have something to do with the market’s reaction to the ECB decision to raise its interest rate; this decision caused the USD to devalue compared to the EUR, and consequentially to other major currencies. Since major commodities, including gold and silver, are priced in US dollars, the decline of US dollar compared to major currencies, was reflected in commodities prices such as gold and silver prices. This announcement, probably did “most of its damage” last week, but may have some little residual effects on the financial markets in the weeks to come. If so, it will probably continue to moderately affect the prices of commodities.

In the mean time, I still speculate that gold prices will continue to moderately increase as the week will progress. The same goes for silver prices.

Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):


China New loans and M2 money supply


13.30 –Canadian Trade balance

13.30 – Report on American Trade balance


For further reading (in this site):