Gold and silver prices 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 haven 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 prices for July 2011.
Gold and silver prices June 2011
During June, silver price 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 price 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 price and 9.1% for silver price.
The chart below shows the changes in gold and silver prices during June, in which the prices were normalized to 100 on May 31st 2011.
The sharper decline in silver price compared with gold price during most of June was demonstrated in the rise of the ratio of gold to silver price during June; the chart below shows that there was an upward trend in the gold to silver price ratio during most of June as gold price outperformed silver price.
When breaking the month of June into two parts, one can see that during the first half of June silver price fell very sharply by 5.7%, while gold price declined by only 0.9%; at the second half of the month, the tables have turned and gold price fell by a higher rate of 1.8% (than in the first half of June), while silver price declined by only 2%.
Notice that during the first half of June, the US dollar had strengthened against major currencies, which might explain the drop in gold and silver prices during the first half of June; during the second half of June the US dollar weakened, yet gold and silver prices kept on falling. Let’s examine the key factors that might have affected gold and silver prices in June.
For there complete Gold and silver price July outlook: