Let’s examine the mains news that might affect the changes in the current gold and silver prices as of March 21st:
Japan’s tsunami attack affects
Japanese officials state that the number of missing or dead could rise to well over 21,000.
There is no clear estimate on how much damage the country suffered however it will probably be over billions of dollars.
There are still concerns about containing the nuclear reactor in Fukushima, however there are reports the Japanese efforts show progress in this direction (see here for more on this subject).
Turmoil in the Middle East and North Africa
The Allied forces struck most of Qaddafi’s air force in order to enforce the UN’s decision of a no-fly zone over Libya. It’s not clear for how long this operation will last and its ramifications, so that the market reacts to this operation with unease as the uncertainty level in the region rises.
The unrest in Bahrain and Yemen continues with reports of protests and conflicts between the police and the protestors.
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 1,426.9 USD / t oz. a 10.8 incline or a 0.76%, as of 10.36*.
The current silver prices, short term futures are at 35.745 USD / t oz – a 0.687 increase or a 1.96%, as of 10.36*.
Gold and silver prices Outlook and Analysis:
Last week the precious metals market closed with sharp rises, but as of Friday, gold prices fell by 1.06% during March, while silver prices rose by 1.83%.
The uncertainty that rises from the turmoil in Japan will likely continue to adversely affect the financial markets. The same could be attributed to the news from the Middle East. There are traders who might start considering the aftermath of Japan’s turmoil and the potential ramifications of the Yen weakening as Japan expands its quantitative easing plan to finance this turmoil (see here). This could further trigger gold and silver prices to rise as the month will progress.
I speculate that gold prices will continue to increase throughout the day, however in the short term in times of uncertainty the market fluctuate with no clear direction, so expect to see high volatility in these metals prices as the week will progress.
The gold to silver ratio: as of Friday, March 18th the ratio between gold and silver prices reached 40.39; the ratio has been declining during March, as silver prices rose while gold prices fell up to date.
Here is a reminder of the top news and reports that are published today and tomorrow that might affect the markets (all times GMT):
15.00 – ECB president’s speech
13.30 – Core retails sales Canada (January 2011)
For further reading (in this site):
- Gold prices bounce back in February – what will be next?
- Gold & Silver Prices started weak and finished strong –14-18 March
- Gold Prices Outlook for 2011 and Analysis of 2010