Gold and silver traders enjoyed from sharp gains to gold and silver prices during most of last week. the G20 summit, the FOMC meeting, the ECB rate decision and the U.S. labor report are the main events for the upcoming week that could influence bullion traders. currently gold and silver prices are traded sharply down. the yen is sharply falling against the USD as Japan intervened in the forex market. Today, Euro Area Annual Inflation will be published, Canada’s GDP report, China Manufacturing PMI and BOA Cash Rate Statement.

Here is a market outlook of precious metals prices for today, October 31st:

Gold and Silver Prices – October Update

Gold price slipped on Friday by 0.03% to $1,747.2; silver price on the other hand slightly inclined by 0.50% to $35.29. The chart below presents the development of gold and silver prices during October (normalized gold and silver prices (September 30th 2011=100)). during October, gold price increased by 7.7% and silver prices by 17.3%.

The ratio between gold and silver prices slightly fell on Friday, October 28th to 49.51. during October, silver price inclined by a slightly larger rate than gold price as the ratio slipped by 8.2%.

Japan Weakens its Currency again

Japan stepped into the forex exchange rate markets again and caused a sharp depreciation of he YEN against the USD and other currencies in order to protect the county’s exporters.  this news may also be among the reasons for the sharp appreciation of the USD against other currencies and consequently could also be a partial explanation for the sharp falls in major commodities including gold and silver.

G20 and EU Debt Crisis

The upcoming G20 Summit to be held in Cannes, France on November 3rd and 4th will probably revolve around the EU debt crisis: the EU leaders will try to persuade additional countries to contribute to the EU rescue fund or to boost the IMF fund. if other countries will support the fund, it could ease the debt concerns and help rally the financial markets.

On Today’s Agenda:

Euro Area Annual Inflation (September): the inflation in Euro Area grew to 3.0% in September; if the upcoming report will show a rise in the inflation rate, it may further lower the chances of an ECB interest rate reduction;

Canada GDP by Industry: this report will present the changes in major industrial sectors for August 2011, and may affect the CAD exchange rate and consequently major commodities prices.

China Manufacturing PMI: this index will cover 800 companies in 20 industries in China; this index indicates the changes in China’s manufacturing sectors growth rate; Bank of Australia –Rate Statement: the overnight money market interest rate of Australia’s Reserve Bank remained flat at 4.75% since November 2010;

Forex Exchange Rates / Gold & Silver Prices – October

The Euro to U.S Dollar exchange rate slightly slipped on Friday by 0.30% to reach 1.4147; other currencies also were traded slightly down against the USD including CAD and AUD. during last week, the sharp gains in the “risk currencies” (i.e. AUD and CAD) coincided with the rally of gold and silver prices. if said currencies will continue to decline today, this shift may also pull down gold and silver prices.

U.S. Treasuries / Gold Price – October

The U.S. 10-year Treasury yield sharply declined on Friday by 0.08 percent points to 2.34%; during October the 10 year treasury yield rose by 0.42 percent point. the LT yields have zigzagged in recent days as the stocks and commodities markets rallied during most of last week. if the yields will continue to rise as it did during most of the month, this might indicate a growing risk appetite in the markets that could help boost the demand for commodities as well as stocks.

Current Gold and Silver Prices per Ounce

The precious metals prices are currently traded sharply down in the Bullion markets:

Current gold prices per ounce short term future (November 2011 delivery) is traded at $1,711.6 per t oz. a $35.6 or 2.04% decrease as of 07:30*.

Current silver prices per ounce short term future (November 2011 delivery) is at $34.290 per t oz – a $0.998 or 2.83% decline as of 07:31*.

The current ratio of gold to silver prices per ounce is at 49.91.

Gold and Silver Prices Outlook:

Gold and silver prices ended the week with light changes after they had rallied during the week. the current drop in gold and silver prices might be related to the “last day of the month speculation”, as traders are closing positions on their gold and silver contracts. the current drop also coincides with the sharp falls in the major currencies against the USD such as YEN, EURO, AUD and CAD. following the sharp gains during recent days in gold and silver prices, there might be a correction today as we are existing October. 

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

11:00 – Euro Area Annual Inflation (September)

13:30 – Canada GDP by Industry

2:00– China Manufacturing PMI

4:30 – Reserve Bank of Australia – Cash Rate Statement

10:30 – GB GDP Q3 2011

15:00 – U.S. ISM Manufacturing PMI

For further reading:

• Weekly Outlook for October 31 – November 4
• Did the Liquidity Trap cause the Hike in Gold Price?
• Gold & Silver Prices | Weekly Recap 24-28 October

• Gold & Silver Prices – Daily Outlook October 28
• Gold & Silver Prices – Daily Outlook October 27

Lior Cohen, M.a. commodities analyst and blogger at Trading NRG.

Gold & Silver Prices – Daily Outlook October 31