Tag Archives: gold-dollar relationship

Nov 18

Price of Gold Weekly Recap – November 11-15, 2013

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Monday Open: $1,282.80
Weekly High: $1,286.10
Weekly Low: $1,266.20
Friday Close: $1,288.30

The week opened slow on a holiday (Armistice in Europe and Veteran’s Day in the U.S.), yet gold prices still took a nosedive overnight before the beginning of the week, after better-than-expected employment reports from the previous week.

Tuesday hit a four-week low on selling pressure. With improved economic reports in the U.S. comes heightened anxiety in the market place that the Fed will soon resume its talk of bond tapering. Asian demand for gold has also decreased, and the U.S. dollar has been strong for about two months now, an overall bearish factor for gold.

Wednesday closed on a new four-week low. Without any major world or economic news, the market is moving solely on technical selling and continued fears about the Federal Reserve. Some analysts have predicted that quantitative easing could start upon its end as soon as December, while others expect it for the beginning of the first quarter of next year. These predictions have moved nearer in time recently, with the strong economic data from the U.S. encouraging people to believe the time is soon. The real defining factor will be how long economic improvement can remain steady.

Thursday experienced a short rally after Janet Yellen, next Federal Reserve chairwoman, released remarks that U.S. monetary policy needs to remain accommodative so that unemployment can continue to decline and the economy can continue to improve. Her support of monetary stimulus is bullish for gold. Friday’s gold prices remained relatively unchanged as the yellow metal headed into the weekend with traders divided on the outlooks for gold.

Nov 11

Price of Gold Weekly Recap – November 4-8, 2013

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Monday Open: $1,314.60
Weekly High: $1,323.80
Weekly Low: $1,284.50
Friday Close: $1,288.80

Gold hit some bumps this week to close the trading day on Friday below the $1,300 mark. Monday began largely unchanged as two Fed officials gave strong indication that the bond tapering program would not begin until the economy has undergone significant improvement. (However, Friday’s economic reports caused this sentiment in the marketplace to become doubtful.)

Tuesday’s outside markets were bearish, with a higher dollar and lower crude oil. The low price of crude oil may indicate a hard time ahead for the commodities sector. Also on Tuesday, the ISM non-manufacturing report showed greater strength than expected, fueling some fear that the Fed may consider bond tapering sooner rather than later. China also reported more upbeat economic news, and leaders of the country are in conference about making economic reforms, which the market place will be anticipating in the near future.

The price of gold was bolstered slightly on Wednesday as the dollar sank and crude oil reached higher. The market place also anticipated the European Central Bank’s meeting on Thursday, as there were suspicions that the ECB will soon ease its monetary policy and lower interest rates.

Though analysts widely did not expect the ECB to make a move, they did in fact decide to lower interest rates on Thursday. Gold saw a short high after the news, since the deflationary measure increases the value of gold as a hedge fund against failing economies. However, despite the news from the ECB, the price of gold dropped to a three-week low on Thursday after surprisingly good U.S. economic reports.

Positive U.S. economic reports also racked the gold market place on Friday, continuing a downward trend. The U.S. employment report for October showed unexpected growth, with 204,000 new non-farm jobs, compared with the expected 120,000 increase. Gold responded poorly to this news, closing the week low, with increased anxiety that this news may prod the Fed to begin anti-deflationary measures soon.

Oct 28

Price of Gold Weekly Recap – October 21-25, 2013

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Monday Open: $1,316.30
Weekly High: $1,353.40
Weekly Low: $1,312.30
Friday Close: $1,352.60

With the U.S. government reopened this week, backed up economic reports were released, positively influencing the price of gold. Thursday marked a four-week high and the week was overall bullish.

Monday opened the week near steady from last Friday’s closing numbers, with the market in anticipation of Tuesday when U.S. economic data was scheduled for release three weeks late.

Tuesday’s data encouraged the price of gold to make some significant gains. The main item on the list was September’s nonfarm payroll data, which showed less-than-expected growth. Unemployment was reported to have receded less than expected, which gives traders reason to believe the Fed will not begin its bond tapering program quite yet.

Wednesday’s gold prices slipped slightly on short-term profit-taking, but Thursday regained those losses and flew up to a four-week high on a few combined bullish factors. The dollar fell to a 10.5 month low on Thursday, bolstering the appeal of gold. Reports from China also gave indication that the holiday season will foster more consumer interest in buying gold.

Overall, gold experienced a strong week and traders are looking forward to next week’s FOMC two-day meeting.

Aug 12

Price of Gold Weekly Recap – August 5-8, 2013

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Monday Open: $1,302.30
Weekly High: $1,314.70
Weekly Low: $1,275.10
Friday Close: $1,313.20

Summer trading was fairly quiet for gold this week. Monday closed the first day of the week on a slight downturn, due to lack of fresh bullish news for precious metals. In related news, China’s economy reported growth on Monday, which could be bullish for gold in the long term, since China is the world’s second biggest buyer of the yellow metal.

Tuesday featured “Fedspeak” by Atlanta Fed president Dennis Lockheart, which also brought the market down. Lockheart made the statement that he expects the tapering program to begin by the end of the year. Tuesday’s gold market responded negatively to this statement, dropping gold to below the $1,300 mark to hit a new three-week low.

Wednesday recovered some of those losses in short covering after midday selling pressure had worn off. Overall, trading is still relatively quiet and uneventful during these “dog days” of summer, when traders in North America and Europe are vacationing and away from their computers.

Thursday was the best of the week for gold, shooting up above the $1,300 bar to overcome previous losses. The dollar contributed to this gain by hitting a six-week low overnight, and the European Union also released news that the economy was improving, a bullish factor for many markets.

Friday ended the week by consolidating the gains from Thursday to end on an overall higher note.

Aug 05

Price of Gold Weekly Recap – July 29-August 2, 2013

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Monday Open: $1,328.70
Weekly High: $1,336.40
Weekly Low: $1,285.10
Friday Close: $1,307.90

The week began in anticipation of major economic news the rest of the week and a high opening statement on Monday. The dollar hit a five-week low on Monday, causing gold to start out on a slight upswing. Tuesday flipped the switch and gold endured modest losses as those outside markets turned bearish – the dollar rose and crude oil sank.

The first big news of the week occurred on Wednesday when the FOMC released their minutes and some key U.S. economic data came out. Wednesday’s price of gold took a slip from these two points, mainly the latter. U.S. gross domestic product for the second quarter reported higher-than-expected numbers, ranking at 1.7$ instead of 0.9%. The monthly ADP jobs report also showed gains, reporting 200,000 new jobs instead of the expected 180,000. The FOMC minutes were still accommodative to gold, with Chairman Ben Bernanke waiting on pushing the tapering program ahead. The new expected start date for the long-anticipated change to Federal Reserve monetary policy, which would be extremely bearish for gold, has been now circulating as around September.

Thursday regained some of those losses as Europe started off on some positive trading deals with the U.S. and gold traders were bolstered by the final closing statement from Bernanke that came out after the traing day had ended. There was no mention of any start date for the tapering program in this statement, a good sign for gold bugs.

Friday, however, undid all the gains of the week and slipped down below the $1,300 mark on very strong U.S. economic data. U.S. manufacturing data and jobless claims reports pushed gold down, further exacerbating worries that positive economic reports will influence an earlier decision by the FOMC.

Jul 29

Price of Gold Weekly Recap – July 22-26, 2013

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Monday Open: $1,332.00
Weekly High: $1,347.00
Weekly Low: $1,311.20
Friday Close: $1,333.10

The price of gold fluctuated within a fairly small range this week, notably pushing above the $1,300 mark. Other than the news of breaking the $1,300 barrier, no major events contributed to the trajectory of the yellow metal this week. Perhaps because traders are starting to enter the summer doldrums, a time when the market slows as people enjoy their vacations, gold moved pretty slowly this week.

Monday exited the weekend with a solid jump beyond $1,300 to a four-week high, inflated by a weak dollar. Tuesday was quiet, with a few downward slumps on technical correction from Monday’s gain.

Wednesday also pulled some downside correction as the dollar regained its strength. Thursday righted those losses with a now sliding dollar, which hit a four-week low. Some jobless claims also came in at lower than expected. The end of the week was fairly quiet, boasting no major news in the global marketplace.

The next major talking point for gold is the Federal Open Market Committee meeting next week, and more U.S. unemployment reports.

Jul 22

Price of Gold Weekly Recap – July 15-19, 2013

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Monday Open: $1,283.10
Weekly High: $1,294.50
Weekly Low: $1,273.30
Friday Close: $1,294.90

The most dramatic shift in the price of gold happened this week on Wednesday, but no radical gains or losses were reported for the week overall.

Monday opened the week with short covering and bargain hunting to end the trading day slightly higher. Not too much global news impacted the prices early in the week, prices instead stagnating on anticipation of the Federal Reserve’s semi-annual address to the House of Representatives on Wednesday and Thursday.

Tuesday saw prices rise on increased stability of U.S. inflation pressures. Traders in the gold market banked on the expectation that the Fed wouldn’t start their bond tapering program as soon as previously expected. This theory is based on Chairman Ben Bernanke’s recent addresses, in which he has not indicated a certain time frame for ending the quantitative easing program.

Part of this is because the U.S. economy, though experiencing improvement, has not accelerated at a rate to deem higher interest rates appropriate quite yet. An unstable job market and low inflation are still the names of the game right now. Last week the gold market responded to the Fed’s slow movement with a 5% increase in prices.

True to expectations, Bernanke did not give any solid indication of when the tapering program might begin. Analysts are calling his address a wash, since no major changes are being made. The sharp drop on Wednesday can more be attributed to a high dollar and technical correction than to reactions to the Fed.

Thursday when Bernanke continued his address, the gold marketplace continued to report little to no reaction. Thursday ended a little higher from traders taking advantage of the brief price fall.

Friday was quiet overall, ending the week a few points higher than it began, pushed upward more by bullish outside markets than any major world news.

Jul 15

Price of Gold Weekly Recap – July 8-12, 2013

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Monday Open: $1,235.40
Weekly High: $1,298.00
Weekly Low: $1,233.70
Friday Close: $1,284.40

In light of all the major losses gold has been suffering lately, gold bugs will be happy to know that this week charted gains in the yellow metal’s corner. With a major spike caused by “Fed speak” on Thursday, gold is now reaching up toward the $1,300 mark.

Monday opened positively for gold, prices reacting to a slight slump in the dollar index after the greenback had hit a three-year high last Friday. Conflict in Egypt is still on the world’s radar, and while nothing extreme happened overnight, gold takes its place once again as a safety fund in times of crisis.

Tuesday’s price gains were caused by economic reports out of China that relayed higher inflationary rates in the country. China’s consumer price index for June was up to 2.7%, higher than the 2.1% of May and the forecast of 2.5%. Inflation, or the threat of inflation, brings more attention back to gold as a hedge fund.

The really big day of the week for gold was Thursday – the FOMC had a meeting on Wednesday, which consisted of more deliberation than action, and no conclusive evidence for any changes in Fed policy in the near future, which caused a major price jump on Thursday. One of the major issues of the meeting was how to convey the Fed’s policies to the public. What is now being called “Fed speak” to refer to the statements issued by Chairman Ben Bernanke is a good sign for gold right now. The result of the meeting is that now the Fed expects to employ its “tapering” program later instead of sooner.

Friday reported a few losses in mixed trading, but nothing too substantial to undo the gains from the day before.

Jul 08

Price of Gold Weekly Recap – July 1-5 2013

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Monday Open: $1,252.60
Weekly High: $1,263.00
Weekly Low: $1,209.80
Friday Close: $1,222.20

Gold continued its downward streak this week, but not without a little momentum upwards first. Monday opened the week on a sharp rally as traders jumped in to take advantage of some short covering from last week’s dramatic losses. The first day of the week hit the week’s high, and if the price would have continued upwards after that, it might have been a sign that gold would have hit its bottom, but Tuesday marked another decline.

The bargain hunting from Monday gave way to a strong selling pressure on Tuesday as the U.S. dollar pushed up to a four-week high. The U.S. dollar and the Federal Reserve’s plan to soon pull back on their quantitative easing program seem to be the major indicators of a continued loss for gold. As the U.S. economy improves, the yellow metal suffers losses as a hedge fund as traders venture into different territory.

Traders are also watching the political situation in Egypt, and the price of gold meandered a little higher by the end of Tuesday. If the crisis in Cairo reaches critical mass, gold could become desirable once again as a safe haven. China is also in gold news, as physical demand for gold seems to be petering off.

Markets went virtually unchanged Thursday, as U.S. trading took a pause on July 4th for the Independence Day holiday. Wednesday showed an equal amount of inaction as many traders started celebrating early.

Friday saw gold take a drop as significantly positive U.S. unemployment data rolled in. The unemployment report was very strong, marking an increase of 195,000 new jobs during the month of June, when only 155,000 to 166,000 were expected. The negative spin on a recovering economy is a lackluster performance from gold. However, analysts predict that even this news isn’t enough to push the Fed to start their tapering program right away, and put expectations for a start date around October.

Next week, focus will be on next moves from the Federal Reserve.

Jun 17

Price of Gold Weekly Recap – June 10-14, 2013

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Monday Open: $1,385.10
Weekly High: $1,394.50
Weekly Low: $1,368.10
Friday Close: $1,390.60

The price of gold was characterized this week by fluctuating economic news from various world markets. A few key moves were bullish for gold, while others reinforced the bearish streak to end the week without much drastic movement.

Monday began on bullish anticipation that China’s decision to buy two gold-backed exchange-traded products (ETFs) would push up demand for the yellow metal. China was the second largest consumer of gold in 2012 worldwide, so analysts expect this is a good thing for long-term gold prospects, however, we should not expect a huge rally in the near future. China’s ETF buy, rather, provides some stability for the continuation of gold demand.

Also, Standard & Poors upgraded the U.S. credit ranking to stable from previously negative on Monday morning, which boosted the dollar short-term, but did not have a wide effect on gold. China released some raw economic data that was weaker than expected, a subtle bearish factor for the raw commodities.

The Bank of Japan was the big catalyst for Tuesday’s loss, spurring some trading out of the market overnight. The bank decided not to expand its current quantitative easing program, as some had hoped, which pulled gold prices down. However, Bank Governor Haruhiko Kuroda said they might consider it again if their borrowing costs go up.

Wednesday morning was trading in the same ballpark as Tuesday, but saw some gains by the evening. It was a quieter trading day Wednesday, with the “risk-off” mentality making way for some technical short covering later in the day, as a weaker dollar incurred some buying back into gold.

Thursday was a day of speculation, as Japanese stock markets showed some losses and analysts worried whether this would spill over into U.S. trading. Even though gold generally acts as a safe haven during these situations, this week it was carried more heavily by a risk aversion mentality. Currently, economic turmoil is not tense enough to prompt a large shift back into gold.

Friday urged gold a little north as President Obama issued a statement that the U.S. will provide arms to Syrian rebels. This news encouraged traders to think about the possibility of escalation in an already war torn country, which did move some back into the safe haven of gold, ending the week slightly higher than it began.

The marketplace will be anticipating an address from the FOMC next Wednesday.