Gold price starts the week the same way it has ended the previous one with rises as the Euro and US economies continue to pose high risk. Today, the Canadian Housing starts and business outlook survey reports will be published; the Bank of Japan will publish its monetary policy statement and rate decision which is likely to remain unchanged.
Let’s examine the news of the day related to the precious metals market for today July 11th:
Gold and silver–July
Gold price inclined on Friday, July 8th by 0.72% to $1,541 – its highest price level since June 22nd. Gold rose for four consecutive days.
Silver also inclined that day by 0.23% to $36.54 – the highest price also since June 22nd.
During July, gold increased by 2.6%, and silver inclined by 4.9%.
The chart below shows the normalized gold and silver (June 30th 2011=100). It shows that gold and silver started July with falls, but they are currently well above their initial price start from the beginning of the month.
As of Friday, July 8th the ratio between gold and silver is still around the 42-43 mark as it rose to 42.19; during July this ratio declined by 2.2%, which means that during July (up to now) silver has outperformed gold.
US Dollar / Gold & silver– July update
The USD appreciated during July against the Euro, but depreciated against the AUD and CAD. During June, the AUD/USD and USD/CAD exchange rates were highly correlated with the daily per cent changes of gold and silver.
These findings might suggest that the recent rally in gold and silver is related to the deprecation of the US dollar against these currencies.
Gold and silver Outlook:
Gold and silver continue their rally as the US labour report didn’t show well on the recovery of the US economy; furthermore, there are still concerns over the European economy despite the ECB rate decision which should have curbed precious metals prices’ rally, but it didn’t; perhaps due to the recent waiver of ECB on collateral rules for Portugal, traders thought this move raises the risk of Euro zone that resulted in gold and silver strengthened
Here is a reminder of the top events and reports that are planed for today (all times GMT):
13:15 – Canadian Housing Starts
15:30 – Business outlook survey – Canada
Tentative – Bank of Japan – rate decision and monetary policy statement
For further reading: Gold and silver prices outlook for July 2011