Guest Commentary: Gold & Silver Prices - Daily Outlook 09.14.2011
Gold and silver continue to seek direction in September. Despite the sharp changes in gold and silver prices throughout the month, gold price (as of yesterday) fell by only 0.1%, and silver price by 1.4%; the sharp appreciation of the USD against major currencies mainly the Euro over the debt crisis in the Euro Area may have adversely affected gold and silver, while the declines in US stock markets and US T-bills yields during September suggest traders are seeking safe heavens including gold and silver. Today, the US PPI report will be published and the US changes in retail sales.
Gold and silver slightly inclined yesterday: Gold inclined on Tuesday by 0.93% to $1,830; silver also rose by 2.43% to $41.19. During September, gold slightly declined by 0.1% while silver fell by 1.4%. The chart below (normalized gold and silver (August 31st 2011=100)) presents the price development of precious metals during September.
The ratio between gold and silver continues be around 43-45; on Tuesday, September 13th the ratio slightly rose to 44.43. During September, gold has slightly outperformed silver as the ratio slightly inclined by 1.3%.
On Today's Agenda:
U.S. PPI:In the previous July report, the PPI increased by 0.2%, after a drop of 0.4% in June; this news could have an effect on gold and silver;
US retail sales:in last month's report about July, the retail sales slightly inclined by 0.5% from the previous month.
USD / Gold & Silver– September Update
The Euro/USD didn’t do much yesterday and slightly declined by 0.01% to 1.3678; during September the EURO/USD rate fell by 4.8%. The appreciation of USD against the Euro during September may have affected gold and silver to trade down. On Tuesday the USD depreciated against other major currencies that are correlated with gold and silver such as CAD. But the AUD/USD exchange rate continued to decline, yesterday by 0.34%. This exchange rate was highly correlated with gold and silver in recent months and could be linked to the recent decline in the bullion market.
Gold and Silver Outlook:
Gold and silver continue to seek direction during September as the weak Euro and AUD against the USD may have affected gold and silver to trade down, while the weak performance in the US stock markets in recent weeks along with the decline in long term US treasury bill yields may have suggested traders are also seeking gold and silver. The change in the past couple of days, in which US stock markets are slightly rising and US treasury bill yields are also inclining might suggest that traders are gradually curbing their enthusiasm towards financial safe heavens. If this trend of the past couple of days will continue, it may further affect gold and silver to trade down. But if this trend won't pan out then during the remainder of September, I still speculate gold and silver will continue to rise at a slow pace.
For further reading:
Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.
By: Lior Cohen, Energy Analyst for Trading NRG
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