Gold & Silver Prices Outlook – 18 April

Gold price is currently moderately dropping in the major commodities market while silver continues its rally; Let’s examine the news and events that might affect current gold and silver prices as of April 18th:

The ongoing Inflation concerns

The inflation concerns are probably one of the biggest catalysts for the rising gold and silver prices, according to many analysts. One of the countries that are followed is China, the world’s second largest gold consumer.

In order to slow down the rising inflation in China that reached by March 5.4% (Y2Y), it was reported that People’s bank of China raised yesterday the reserve requirement ratio (RRR) by 50 basis points to reach 20.5% for large lenders.

This raise it the fourth in 2011 and its purpose is to cool down the lending commercial Chinese banks provide and thus curb the rising inflation.

As long as the economic growth in China rises, which usually coincide with rising inflation, the estimated demand for gold is likely to increase as well.

China and India together constitute over 51% of the worldwide demand for gold in jewellery, bars and coins. In 2010, China’s annual demand for gold in bars and coins has risen by over 70% (Y2Y).

Gold and silver prices April 2011

The uprising of gold and silver continued last week and up to Friday April 15th, silver price has risen by 12.8%, while gold price increased by 4.0%. As a comparison, during March 2011 silver price gained 10.1% and gold price only 0.6%.

In the chart below are the changes of gold and silver prices during April 2011, normalized to 100=April 1st 2011; the chart shows how silver prices have outperformed gold prices mainly since the end of last week:


Gold and Silver prices normalized 2011 up to April 18 2011

The gold to silver ratio: As of Friday, April 15th the ratio between gold and silver prices kept on falling and reached a new low of 34.91, as seen in the chart below.


Gold and Silver prices ratio 2011 April 18

Update from Libya

The recent news from Libya is that the rebels have managed to ward off Qaddafi’s forces from the city of Ajdabiya, in the central region of Libya.

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

Current Gold and Silver prices

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

The current gold price, short term futures (May 2011 delivery) is traded at 1,481.0 USD / t oz. a 5$ decrease or 0.34%, as of 13.19*.

Current silver price, short term futures is at 42.73 USD / t oz – a 0.159 increase or 0.37%, as of 13.19*.

(* GMT)

The current ratio of gold to silver prices is at 34.7.

Gold and silver prices Outlook and Analysis:

The news items have listed above are concerns that affect inventors and traders in gold and silver, however aren’t something new that could shift the direction of the precious metals markets. That’s why I think we will probably see some fluctuations in gold prices, but the ongoing rising trend will continue, even if there might be some falls along the way during the week; for silver prices this upward trend will continue even more so.

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


2.30 – Monetary Policy meeting Australia’s Bank


13.00 – Canadian Core CPI


For further reading (in this site):