Tag Archives: us economy

Oct 21

Price of Gold Weekly Recap – October 14-18, 2013

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Monday Open: $1,272.70
Weekly High: $1,324.80
Weekly Low: $1,253.50
Friday Close: $1,315.40

The reopening of the U.S. government this week was, perhaps counter-intuitively, good for gold. The end of the partial shutdown on Wednesday supported gold prices, since traders can look forward to Congress revisiting the debt ceiling in a few months, meaning the U.S. economy is nowhere near recovered, and in fact will likely continue the Federal Reserve’s quantitative easing program until there is a more solid foundation underfoot.

Monday opened the week on a high note, rebounding from a drastic sell-off on Friday, which is now being touted by some analysts as market manipulation. The short rally on Monday kicked gold back up from a three-month low.

Tuesday lost some gains to short-term pullback yet gained some momentum because of anticipation of the debt ceiling cut off date, October 17. If the U.S. government would have been unable to reach an agreement about raising the debt ceiling, the country would have defaulted on some loans and had the credit rating downscored.

Luckily, Congress and the Senate were able to pass a budget by Wednesday night, effectively reopening government’s doors by Thursday. The effects of this decision on the price of gold hit full stride Thursday morning as traders rejoined the market. The thinking is that because the two parties still do not see eye to eye, there may be another incident like this in a few months, and the Fed will certainly not be raising interest rates in such an unstable climate. Also, because the government had been on hold for 16 days, no economic reports had been released in that time, so traders are awaiting the state of the economy. The dollar slipped and fell, as well, during all this talk of devaluation, another bullish factor for gold.

By Thursday, some of those gains were lost to short-term traders exiting the market. Friday followed suit and maintained a steady range into the weekend.

Sep 16

Price of Gold Weekly Recap – September 9-13, 2013

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Monday Open: $1,386.60
Weekly High: $1,387.40
Weekly Low: $1,308.00
Friday Close: $1,323.40

Syria and the Federal Reserve were the two main factors influencing the gold market this week, and both can account for the week’s steady decline. After last week’s ramp up in the gold market due to increased pressure about a possible U.S. military strike on Syria, this week followed with de-escalation of the conflict, and therefore a drop in the safe haven demand of gold.

Monday began this steady decline when Secretary of State John Kerry announced the U.S. will be exploring a diplomatic agreement with Russia to eliminate Syria’s store of chemical weapons, thereby avoiding any warfare. Tuesday reached a three-week low on continued speculation about Syria.

The beginning of the week’s drop in prices was also influenced by continued talk that the Federal Reserve will start its tapering program soon. Gold has dropped 17% in 2013 so far after a decade of gains, largely due to an improved U.S. economy, and some analysts believe this trend will continue throughout the rest of the year.

By Wednesday, the price of gold had dropped to $1,363 by lunchtime due to the Assad regime in Syria accepting Russia’s nonviolent plan to disarm the country of chemical weapons in order to avoid a U.S. airstrike. With the Syrian crisis all but over, gold prices continued to plummet.

Thursday saw gold hit a fresh four-week low on improved jobs claims reports in the U.S. and anticipation of next week’s FOMC meeting, in which many expect the Federal Reserve to announce the end of its loose monetary policy. Friday continued this train of thought, and the week ended only slightly above the $1,300 mark.

Sep 09

Price of Gold Weekly Recap – September 2-6, 2013

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Monday Open: $1,389.90
Weekly High: $1,415.20
Weekly Low: $1,366.90
Friday Close: $1,389.20

Tensions in Syria continued to influence gold this week, and other global economic news also registered on gold’s radar.

Monday was a quiet day as U.S. traders stepped away from their computers for the Labor Day holiday. Overall, the yellow metal was little changed on the first day of the week.

Tuesday began the upward swing of the week, with traders returning to their desks to sweep up some of the lower gold prices for short-term trading. The continued question of a military strike on Syria was slightly revved up on Tuesday, as it seemed Congress might support President Obama’s plan to attack Syria for using chemical weapons. Traders returned to the gold market Tuesday on some increased safe haven buying.

Tensions eased slightly on Wednesday, causing some pullback from the stress trading. Prices also dipped on profit taking from the previous day’s wins. The U.S. Federal Reserve released an economic report Wednesday afternoon that showed the U.S. economy officially growing mildly to moderately, depending on sector. This news was not surprising, so it did little to affect market conditions.

Thursday morning was quiet on the gold trading front as traders anticipated a slew of U.S. economic data to be released in the afternoon. Sure enough, this data was positive and so caused a slump in the gold market. The reports included the weekly jobless claims report, the ADP national employment report, chain store sales trends, and more.

Even so, it was the U.S. jobs report Friday morning that people were anticipating, since many believe a positive report can influence the Fed to start their tapering program earlier rather than later. It was good news for gold bugs, however, with the unemployment rate falling one point to 7.3%, which was still behind expectations. The decrease was also not because people were getting new jobs but because people were leaving the work force, according to analysts. The non-farm payroll report was also lower than expected. Therefore, Friday afternoon saw prices rise to end the week near to where it began.

The Syrian conflict and the Federal Reserve’s decision about when to start the tapering program will likely influence gold prices next week.

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 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.

May 20

Price of Gold Weekly Recap – May 13-17, 2013

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Monday Open: $1,430.80
Weekly High: $1,430.80
Weekly Low: $1,372.30
Friday Close: $1,382.60

Gold experienced one of its worst losing streaks this week, breaking below the $1,400 barrier. The main reason for gold’s losses this week include a generally recovering world economy, specifically a steadily gaining dollar and record stock market highs, as well as indications from the Federal Reserve that the low interest rate policies will be slowly “tapering” out, as is the new buzz word around that topic.

Monday’s opening price of $1,430 was in fact the week’s high. This week marked the longest streak of price decline in four years, while the dollar is experiencing a 9.5 month high. This gold-dollar relationship is one key factor in the drop in gold. The greenback hit a strong stride this week in international affairs, gaining momentum as a more desirable investment than precious metals. The U.S. and Japanese stock markets are hitting significant (record or multi-year) highs, which moves investors away from safe haven assets.

On Wednesday, gold slipped below the psychological threshold of $1,400. Tuesday’s sell offs triggered some automatic sell-stops, and these continued through the rest of the week. There was no particular event or external factor that pushed the yellow metal through this barrier, but rather the continued selling pressure it has already been experiencing.

Another factor that is pushing the price point down is the anticipation of the Federal Reserve to gradually increase interest rates and pull back their quantitative easing program. The Wall Street Journal released a report Friday that confirmed Ben Bernanke and Fed officials have decided upon a strategy to slowly wind down the easy monetary policies. This has been on the horizon for a while, and sources indicate that 2013 will be the year that ends the 0% interest rates and bond-buying programs, or at least slows them down, which would be all around bearish for gold.

On Thursday, San Francisco Federal Reserve Bank President John Williams publicly expressed his tapering of the easy monetary policy. Friday closed the market with a seven-day losing streak and a 4-week low.

However, for all the downsliding in the gold market lately, there is still some demand for physical gold in India and China, especially jewelry, bars and coins.

Feb 11

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

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Monday Open: $1,674.40
Weekly High: $1,683.70
Weekly Low: $1,666.90
Friday Close: $1,668.80

It was a very choppy week for gold that ended on a slightly lower note than it opened. Rife with economic news from China, the U.S. and the European Central Bank, gold did some flips this week and continued its streak of general volatility.

Monday was the quietest day of the week, with just a few outside factors sparking a bearish lull, including a higher dollar and lower crude oil.

Tuesday’s price shot straight up midday on news from China that their new gold flow into the country had risen 47% in 2012 to an all-time high. Central banks across the world have been buying gold for their reserves, so China’s continuation of this trend was a positive sign for the general price of gold. However, the price shot straight down again after positive economic news from the U.S. and the euro zone economy. The euro zone showed stability and growth in January, the best in 10 months, and a fiscal report was released from the U.S. that predicts the national budget to drop to $845 billion in 2013, a major shift from the trend of trillions-plus. These were both signs to gold investors to move into the equity market, causing a price shift downward.

Wednesday showed slight gains on technical trading and short covering, but it was also a fairly uneventful day as traders awaited the outcome of Thursday’s European Central Bank meeting.

Thursday proved as choppy as Tuesday, starting in the morning with Mario Draghi, ECB president, speaking on the improved state of the European economy, though still hinting at reservations for the euro. This sunk the euro, pushing gold up. Then, however, U.S. jobless claims reports came in and showed significant improvement in unemployment, the claims report falling 5,000 short of expectations. Gold dropped. Yet, the price of gold didn’t stay down long as bargain hunters entered the market to buy up stocks at the lower price.

Gold ended slightly lower on Friday on a higher dollar and a rise in U.S. equities.

Feb 04

Price of Gold Weekly Recap – January 28-February 1, 2013

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Monday Open: $1,654.50
Weekly High: $1,681.90
Weekly Low: $1,654.50
Friday Close: $1,667.90

It was a good week for gold after many U.S. economic reports and the Federal Reserve’s regular meeting concurred that the U.S. economy is not yet in a state of repair strong enough to push down gold. Following a bearish decline from last week, this week closed on a higher note than it opened.

Monday started off sluggish, a little flat on a relatively strong dollar. Most of Monday was spent in anticipation of news to come later in the week. Tuesday rallied a little bit as the dollar sunk slightly, and a Consumer Confidence report revealed worse than expected economic data – a 58.6 rating, well below the 64.0 expected mark.

Wednesday was the real day of growth for gold this week. The price of gold was bolstered by the Federal Reserve’s FOMC meeting, in which Chairman Ben Bernanke reiterated the low interest rates and bond-buying program that was set in motion at the end of last year. Concerns have arisen lately that the Fed might pull back on their quantitative easing should the economy show considerable improvement, but the U.S. GDP report released this week showed that the country’s economy had actually contracted 0.1% in the fourth quarter of 2012. Bernanke confirmed that interest rates would remain negligible until unemployment hits 6.5%.

Unfortunately for gold, the yellow metal gave back all its gains on Thursday, despite bullish factors in the marketplace like a weak dollar and poor economic data. Though no one single external factor can be pinpointed for this loss, the drop was probably due to profit-taking from short-term traders.

Friday saw a continued release of negative U.S. economic data, which gave a small spike to the price of gold. The U.S. jobless claims report missed their mark by 38,000, ticking the unemployment rate up to 7.9%. However, later in the day a stronger manufacturing report was released, undoing many of the slight gains that had occurred earlier in the day.

Next week, gold is predicted to stay in the $1,650 to $1,700 range, with the European Central Bank meeting on traders’ radar.