Gold & Silver Prices Outlook – 21 April

Gold and silver prices continue to break new fronts as gold price is over 1,500$ and silver price is now nearing the 45$ mark.


Let’s examine the news and events that might affect current gold and silver prices as of April 21st:

Is there a diminishing Australian effect on gold and silver?

Gold and silver prices keep on rising as gold price is hovering over the 1,500$ mark and silver price is nearing the 45$ mark. As of yesterday April 20th, silver price has risen by 17.83%, while gold price increased by 4.90%.


Gold and Silver prices 2011 April 21

The USD and Hong Kong dollar exchange rate (USD/HK) has shown during April string negative correlation, as seen in the chart below. This might be related to the effect China’s economy has on gold and silver prices. If this correlation will continue to show in the following weeks it might shed some light on the causation and not correlation of the USD/HK with gold and silver prices.


Correlation Gold & Silver Prices and USD HK currency Dec 2010- April 2011

The gold to silver ratio: As of Wednesday, April 20th the ratio between gold and silver prices kept on falling and reached a new low of 33.71 – This drop is mostly due to the ongoing rise of silver prices at a higher rate than gold prices.

Despite this ongoing decline in ratio, the daily percent changes of gold and silver prices are still highly correlated at over +0.85.


Correlation of Silver and Gold Prices  Dec 2010- April 21 2011

S&P downgraded the outlook of the US credit rating


It was recently announced that S&P has given its first ever negative outlook to the US credit rating in 2012.

This announcement might also be one of the reasons gold and silver prices have risen so precipitately in the last few days.

Update from Middle East

According to BBC, the rebels have managed to capture the Wazin crossing. The rebels currently control much of the eastern Libya.

See here for a more detailed update on Middle East and its effect on commodities’ markets.


Current Gold and Silver prices

U.S. markets show major precious metals prices are traded with rises:

The current gold price, short term futures (May 2011 delivery) is traded at 1,506.1 USD / t oz. a 7.2$ increase or 0.48%, as of 17.24*.

Current silver price, short term futures is at 45.985 USD / t oz – a 1.524 increase or 3.43%, as of 17.24*.

(* GMT)

The current ratio of gold to silver prices is at 32.75.

Gold and silver prices Outlook and Analysis:


This ongoing rapid rise in gold and silver prices might be generated due to additional speculative money entering the precious metals markets; from Macro economic perspective there was no recent news that could have such an effect on precious metals and the same goes to the actual silver and gold market – there was no news from that front. Such a bullish market might be due to the recent S&P rating outlook to the US economy as listed above.  I speculate we will probably continue to see rises in gold and silver prices in the next day or two, which will moderately subside by the end of the week.


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


13.30 – Department of Labor report – US unemployment claims

15.30 – EIA report about Natural gas storage



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