Gold & Silver Prices Outlook –25 March

Let’s examine the mains news that might affect current gold and silver prices as of March 25th:

Japan’s tsunami affect on gold

The tsunami attack on Japan along with the earthquake is still adversely affect Japan mainly due to the damage they caused nuclear reactor in Fukushima.

Japan officials estimate the rebuilding of the damage will cost over 300 billion US dollars.

In response, Bank of Japan plans to add 15 trillion yen or about 183 billion US dollar to help cope with this disaster: 5 billion yen were via the BOJ’s existing asset-purchasing program (quantitative easing plan) and 10 billion yen via a “funding supply” operation. If the estimates are correct, we might see additional funding plans to cover the natural disaster damage.

Does this have an affect on gold and silver prices?

So far during the month of March (up to March 24) there is little correlation among gold and silver prices and Yen (daily percent changes) with -8.6% and -2%, respectively.


Correlations Gold Prices and major currencies March 2011 (daily percent change)

On the other hand, there is a strong correction among Australian dollar and gold and silver prices as seen the charts above and below.

Correlations silver Prices and major currencies March 2011 (daily percent change)

Since Australia is a major exporter of gold and to the top importing countries such as China, India and Japan. The recent rise in gold and silver prices might also be linked to the strengthening of AUD compare to USD.

EU Economic summit

Today and tomorrow there will be an economic summit of all 27 Euro countries. The agenda for the summit will include how European Union banks will disclose their sovereign debt holdings as part of stress test.

Current Gold and Silver prices

European markets currently start off with mixed trends in major precious metals prices:

The current gold prices, short term futures (April 2011 delivery) are traded at 1,433.8 USD / t oz. a 1.1$ decline or a 0.08%, as of 13.50*.

The current silver prices, short term futures are at 37.455 USD / t oz – a 0.08 increase or a 0.21%, as of 13.50*.

(* GMT)

Gold and silver prices Outlook and Analysis:

As seen in the chart below, there is an ongoing upward trend in silver and gold prices especially in the past week and more so for silver over gold; thus, up to date, during March gold prices rose by only 0. 3% while silver prices rose by 8.6%.

Gold and Silver prices normalized 2011 up to March 25

Up to this month most of the rally in precious metals was fueled by gold prices rising and silver prices following, and now the roles have changed and the tables have turned as silver is rising while gold is remaining steady. This trend might also be an indication of hot and speculative money entering the market and betting on silver – the cheapest among precious metals – over gold.

The gold to silver ratio: as of yesterday, March 24th the ratio between gold and silver prices keeps on falling and reached 38.39 – the lowest level this year.


Gold and Silver prices ratio 2011 up to March 25

It is still not clear if this recent upward trend will last, however I speculate that we will probably continue seeing gold prices stabilizing with little changes and no clear trend as the week winds down.

As for silver price, its rally it might continue, however at a lower rate than it did in the past week.

Here is a reminder of the top news and reports that are published today and tomorrow that might affect the markets (all times GMT):


10.00 – Monetary developments in the euro area

13:30– US GDP 4Q report

All day – EU Economic Summit


All day – EU Economic Summit



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