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Gold & Silver Prices Outlook December 13 2011

Gold & Silver Prices Outlook December 13 2011
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Gold and silver prices started the week with very sharp losses; many commodities prices, stock indexes and forex exchange rates also sharply declined yesterday. This reaction was probably prompted by the markets’ disappointment from the recent EU Summit. Moody’s announcement to reconsider all EU countries credit rating may have also helped push down the financial markets. Today, the FOMC meeting will be held, U.S. retail sales report will be published and GB’s CPI will be reported. Currently gold and silver are traded with moderate changes.

Here is a market outlook of precious metals prices for today, December 13th:

Gold and Silver Prices –December Update

Gold price sharply declined on Monday by 2.83% to $1,668.2; silver price also declined by 3.88% to $31.00. The chart below shows the development of gold and silver prices in December (normalized gold and silver prices to November 30th 2011). During December gold price fell by 4.7% and silver price by 5.49%.

Gold price forecast & silver price outlook 2011 December 13



The ratio between gold and silver prices slightly rose on Monday, December 12th to 53.81. During the month the ratio slightly inclined by 0.8% as gold price moderately outperformed silver price.

The market didn’t react well to the agreement struck among many EU countries; the agreement was reached over the weekend in the recent EU summit.

Moody’s also reacted to this agreement and stated that it will review all the EU’s countries credit rating and may revise it down. This news was probably also among the factors to drive the commodities markets down including precious metals market.

On Today’s Agenda

FOMC Meeting (Statement): The upcoming FOMC meeting might bring some new developments especially if the Fed Chairman Bernanke will eventually add a new program to the recent FOMC $400 twist plan that was announced back in November. The FOMC meeting could affect gold and silver prices;

U.S. Retail Sales: this report will refer to November; in the October report, the retail sales, when controlling for the price changes, moderately increased by 0.5% from the previous month; this report could affect commodities traders (see here my review of the recent report).


Forex Trading / Gold & Silver Prices – December Update

The Euro to U.S Dollar sharply fell yesterday by 1.48% to reach 1.3188. Other forex exchange rates such as the Australian dollar and Canadian dollar also sharply fell against the US dollar. The recent decline in the forex markets probably prompted yesterday’s sharp falls in gold and silver prices. If the Euro and AUD will continue to trade down against the USD they may keep gold and silver prices low.

U.S. Treasuries / Gold & Silver Prices – December Update

The U.S. 10-year Treasury yield declined on Monday by 0.04 percent points to 2.03%; during December the 10 year treasury yield dropped by 0.05 percent point. Furthermore, during December there were positive correlations among the U.S. 10 year notes yields and gold and silver prices (see chart below). If the long term U.S. treasury yields will continue to decline, it may pressure gold and silver prices to decrease as well.....READ MORE

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