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Gold and silver outlook for July 2011

|Includes:Randgold Resources Limited (GOLD)

Gold and silver showed weakness during June as they did during the previous month of May. Could it be that the appeal of gold and silver as a safe heaven was less true in recent months than it was in recent years? What is up ahead for gold and silver prices in July 2011? Let's examine the precious metals market for June and try and provide an outlook for gold and silver for July 2011.

For the complete Gold and silver price July outlook see here.

Gold and silver June 2011

 During June, silver fell sharply in three pulses at the beginning of the month (June 2nd); at the middle of the month
(June 10-14); at the end of the month (June 22-27). On the other hand, gold changed very moderately during most of June and had a sharp decline only near the end of the month (June 22-24).

 By the end of the month, the two precious metals fell in June by 2.2% for gold and 9.1% for silver.

 The chart below shows the changes in gold and silver during June, in which the prices were normalized to 100 on May 31st 2011. 

The sharper decline in silver compared with gold during most of June was demonstrated in the rise of the ratio of gold to silver during June;  the chart below shows that there was an upward trend in the gold to silver ratio during most of June as gold outperformed silver. 

When breaking the month of June into two parts, one can see that during the first half of June silver fell very sharply by 5.7%, while gold declined by only 0.9%; at the second half of the month, the tables have turned and gold fell by a higher rate of 1.8% (than in the first half of June), while silver declined by only 2%.


Notice that during the first half of June, the USD had strengthened against major currencies, which might explain the drop in gold and silver during the first half of June; during the second half of June the US dollar weakened, yet gold and silver kept on falling. Let's examine the key factors that might have affected gold and silver in June.  

For the complete Gold and silver price July outlook see here.



Stocks: GOLD