Tag Archives: gold price analysis

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.

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 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.

Jul 01

Weekly Gold Price Recap – June 24-28, 2013

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Monday Open: $1,282.60
Weekly High: $1,287.40
Weekly Low: $1,186.30
Friday Close: $1,233.00

The gold market experienced major losses this last week of June as the yellow metal once again hit a 3-year low. A far cry from the predictions of $2,000 per ounce made last year, gold is weighing in around $1,200 this week.

Monday saw gold fall about $20 to $1,277 as Goldman Sachs downgraded predictions for future prices, setting a new bar of $1,030 for the end of the year. The more stable economic situation in the U.S. and global markets are accounting for the major price drop in gold. Last Wednesday, Federal Reserve Chairman Ben Bernanke made the most explicit statement yet about pulling back on the quantitative easing program that has been in effect since 2008.

This zero-interest rate model has spurred gold to record levels in the past 5 years, as gold is non-taxed and often sought as a safe haven investment during times of economic turmoil, but now with an improving economy and lower unemployment rate, the end of these liberal economic measures is near. With the change in the economic landscape, traders are gravitating more towards higher returns elsewhere. Even the high demand for physical gold in India is not enough to put gold back at its previous high.

Gold has dropped 23% this quarter, losing about one quarter of its value since April. The yellow metal hit a fresh three-year low on Wednesday. Part of the dramatic pullback in the market is due to economic crises in China, commonly referred to as a “cash crunch,” which has drawn investors away from raw commodities.

The precious metal broke below the $1,200 barrier on Thursday for the first time since 2010. Analysts say that a continuing drop in gold should be expected. A professor of business at Duke University, Campbell Harvey, estimates the “fair value” of gold, or the average, to be about $800, which predicts even a ways to go before gold hits a plateau.

Friday marked the end of the second trading quarter of the year, with gold having dropped 30% since the beginning of 2013. The yellow metal is heavy in the news lately for the harsh beating it has taken since the “golden years” of 2011 and 2012, starting when gold hit a record high of $1,921 in September 2011, then continuing to remain in the upper reaches. Contrary to some hopeful analysts’ predictions, though, It never quite broke $2,000, and it is floundering at nearly half that now.

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.

Jun 10

Price of Gold Weekly Recap – June 3-7, 2013

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Monday Open: $1,410.60
Weekly High: $1,417.00
Weekly Low: $1,378.40
Friday Close: $1,378.40

Gold experienced another faltering week, failing to break through the $1,350-$1,400 price bracket. Some traders were hoping to see the yellow metal push through by the end of week, but other forecasters are touting the end of the gold bubble and prices dropping down to $1,000 in the near future.

Monday saw slight gains as the dollar hit a three-week low. The whole week was primarily characterized by gold’s relationship to the dollar. China and Japan also lended some economic data to the short rise in gold at the beginning of the week, with stock markets from these countries fluctuating slightly.

Tuesday turned this gain around on a technical correction; traders started pulling out the market after Monday’s advance. Wednesday was also noneventful for the price of gold, as the market saw some gains, but was primarily focused on anticipating the Federal Reserve’s announcements on Thursday and U.S. monthly economic reports due on Friday.

The Federal Reserve meeting contained no surprises, and therefore did not affect the gold market. Thursday, however, spiked up to the week’s high as traders expected poor results from Friday’s jobs reports. A lower dollar supported this move, and the U.S. stock market was generally not performing well on Thursday, adding more reason to buy back into the safe haven of gold.

Yet, Friday undid all of these hopeful advances when the U.S. economic report announced growth in the manufacturing sector and one basis point of a percentage higher on the unemployment rate (now at 7.6%) as more people have returned to looking for work. Gold maintained steady Friday morning, ahead of the reports, but this precious metal quickly fell in the afternoon as the rally some hoped for did not happen.

Jun 03

Price of Gold Weekly Recap – May 27-31, 2013

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Monday Open: $1,394.50
Weekly High: $1,420.70
Weekly Low: $1,379.30
Friday Close: $1,385.50

The price of gold posted its 7th monthly decline in 8 months this week. Gold has always been volatile, but it seems as if this losing streak isn’t going to skyrocket upwards anytime soon.

Monday was a fairly complacent day, but Tuesday experienced some losses against the strong U.S. dollar. However, the losses were minimal for gold as compared with the relatively high place of the greenback, which is a good sign for gold.

Wednesday saw the yellow metal make some gains as the dollar dropped. U.S. Treasury bonds are rising in price this week, hitting the highest in a year, which is a sign of a recovering economy and increased likelihood that the Federal Reserve will soon start to change its loose monetary policy, a prospect that has been on the gold horizon for many months now.

Thursday saw gold continue its upward climb as Asian stock markets declined and sent some people back to the safe haven of gold. Thursday marked a fresh 2-week high for gold, but declined again on Friday on a technical correction. European stock markets reported high unemployment, the U.S. dollar index was firm, and the market place awaited economic data from China on Saturday. Also, the wedding season in India is now over, reducing demand for physical gold.

 

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.

May 06

Price of Gold Weekly Recap – April 29-May 3, 2013

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Monday Open: $1,468.10
Weekly High: $1,482.30
Weekly Low: $1,440.90
Friday Close: $1,469.40

Gold rebounded somewhat to the nearly $1,500 level this week as economic matters returned to center stage and fresh interest in gold returned. Monday opened with a 1% gain since Friday on a falling dollar. Tuesday was up and down but ended higher on bargain hunting and the declining dollar. U.S. economic reports issued on Tuesday were a mixed bag, but not conclusively positive, spurring more interest back to precious metals.

The big news of the week was the Federal Reserve meeting on Wednesday. Gold dropped sharply in anticipation, but bounced back up after the FOMC announced that they were going to maintain both zero percent interest rates and the $85 billion per month bond buying program until the economy picks up. There are no indications from economic data that unemployment will drop anytime soon, and many March reports were weaker than expected. The Fed also made no mention, as previously alluded to, of a near end in sight for their economic policies. These are all bullish factors for gold.

Thursday showed steady gains as traders picked back into the market, and the European Central Bank lowered its interest rates from 0.5% to 0.25%. The Euro zone is also experiencing slow economic growth. Friday’s gold prices slipped down back to near the week’s opening price on better-than-expected U.S. jobs reports. Unemployment dropped to 7.5% in April, the lowest in four years.