Tag Archives: gold price analysis

Jul 14

Price of Gold Weekly Recap – July 9-13

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Monday Open: $1,581.20
Weekly High: $1,600.10
Weekly Low: $1,556.30
Friday Close: $1,589.40

Gold took a minor upswing followed by an equal downturn this week, followed by another upswing to regain balance, opening around $1,580 to close at just about the same price. This week continued the major pattern of gold this year, with modest (under $50) fluctuations, though no major changes. Many experts believe that gold will hover around the $1,500 mark amidst all the economic changes happening in the U.S. and Europe, and if it does so, it remains a fairly stable investment. Reaching the $1,600 mark is always a slight cause for celebration, and it just touched it again this week.

Gold continues to rise inversely to the dollar, and Monday opened with a strong dollar, pushing gold down. Tuesday marked a volatile day, as morning news reported dollar losses, pushing gold up to exactly $1,600, then dropping back down $40 as updated information became available and the euro actually spiked tremendously. This proved to be the strongest inverse correlation between gold and the dollar in almost two months, since the dollar reached nearly a two-year high.

Still, gold is hovering in the safe range, which falls between $1,550 and $1,630.

Afshin Nabavi, head of MKS Finance, commented on this recent price range for gold. He said on Tuesday, “It looks like $1,630 is pretty much a brick wall, while on the downside, $1,550 is equally strong support. So unless something extraordinary happens, we will be stuck in this range…Everyone wants to get involved in gold, but they have been disappointed several times, so I think we need a confirmation that gold is really going somewhere, and that will only happen when it gets above $1,630, only then will we have some investment come back into the market.”

As for now, gold is trading in a fairly safe, yet limbo, state.

Wednesday and Thursday saw similar hesitations against the dollar, as investors await the Fed’s next move. Recently, the dollar has been performing well and the Fed hasn’t eased up on economic restrictions, keeping gold investors on their toes. More support has lately been headed in the greenback’s direction. China and Hong Kong have experienced some recent slowing of their economy, and investors waited expectantly all week to hear news of China’s refinancing policies.

So, as much as the price of gold dropped inversely to the dollar at the beginning of the week, it gained an equal amount in response to Friday’s news that China’s economic growth has fallen short of expectations. This report came a day after the Fed’s minutes reported no change in policy on Thursday, and gold saw a modest spike as investors took hope in the yellow metal’s recovery against a flailing yen. China reported a sixth consecutive quarter of losses, so Friday ended with a net weekly gain of about $6, as many believe the economic reports might spur the Chinese government into easing monetary rates.

Jun 30

Price of Gold Weekly Gold Recap – June 25-29

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Monday Open: $1,584.00
Weekly High: $1,602.90
Weekly Low: $1,550.80
Friday Close: $1,599.10

Gold prices this week flew up and down amidst significant Eurozone trading talks and U.S. rule change proposals. Gold opened around a steady $1,580 on Monday, dropped to a four-week low on Thursday and began trending back up by Friday.

This entire year has been characterized by volatile gold prices, a significant change from the past decade, which featured a fairly constant upswing, and this week was no different. Monday started in a wait-and-see kind of mode as investors anticipated the week’s events. This mode continued through the beginning of the week as gold stayed in a relatively steady limbo through Wednesday. The European Summit meeting was scheduled to begin on Thursday, so gold became a safe haven investment for some, as some others pulled out of the market.

Last year, gold reached its apex of $1,920 when the European debt crisis hit its full swing, but this year other factors are coming into play to temper a full-fledged uprising of the metal. Wednesday saw positive economic reports in the U.S., followed by two more positive reports on Thursday, and the EU summit began with very low hopes on Thursday. All this led to a fresh four-week low for gold on Thursday.

Yet, after continued talks about economic policy in the Euro Zone, some surprising things came out of the EU Summit that led to a slight rally for gold. These talks included proposals for centralizing banks, easing restrictions on emergency loans, and establishing one single banking supervisor for the EU Bank. Poor economic data and a weak U.S. dollar compounded this news to add to the fresh high of slightly above $1,600.

In other news, Obama’s health care act did not impact gold. There was also an FDIC rule proposal on Wednesday that may have significant implications for gold moving forward. The FDIC is an independent facet of the U.S. government that guards against risky bank dealings, and they ruled that gold would be considered a zero risk asset. Once this proposal is passed into law, it could lead to a significant bull market for gold up ahead.

Jun 16

Price of Gold Weekly Recap – June 11-15

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Monday Open: $1,594.70
Weekly High: $1,631.70
Weekly low: $,1585.80
Friday Close: $1,626.70

Gold has been on a steady upturn this week, trading fairly consistently above the $1,600 level. The metal has rebounded dramatically since last week’s pull away from the market when Federal Reserve Chairman Ben Bernanke gave no sign as to U.S. economic easing. This week, gold investors became more concerned with the European debt crisis, and the price of gold rallied when it became clear that Spain, Italy and Greece are all facing even more severe economic worries.

Monday started trading significantly higher than last week’s close after a rescue loan of $125 billion to Spain fell short of expectations to ease the country’s long-term economic instability. Italy also experienced greater debt, and Greece’s economy is in limbo as voters take to the polls on Sunday.

Wednesday saw modest gains, partly due to the release of more weak U.S. economic data. The entire week has seen asteady growth in gold, especially compared to the volatility of the past few weeks. Friday closed solidly above the $1,600 line.

However, while prices continued to rise throughout the end of the week, the price of gold still hangs delicately in between a safety net and risk asset. Upcoming events in Greece and the Federal Reserve will play a role in gold’s future. The Greek elections are this Sunday, and if voters ring in politicians who are against the bailout loans, as many expect, it could mean Greece moves away from the euro, further weakening the stability of the region’s currency. This could mean strength for gold as a security measure.

In fact, Kitco’s weekly poll showed that most people expect gold to rally after this weekend. In a sample of 23 participants, 18 anticipate a rise in gold. However, some skeptics aren’t sure of the outcome of the Greek elections, or whether it will signify a move to gold; some think it will actually strengthen the dollar.

In U.S. economic news, the Federal Reserve is scheduled to update the public on the state of economic policy this coming Tuesday and Wednesday, June 19th and 20th. As usual, investors are hopeful that Bernanke will announce some sort of loosened economic policy that involves printing more paper money, thus weakening the dollar and boosting gold.

Jun 09

Price of Gold Weekly Recap – June 4-8

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Monday Open: $1,619.10
Weekly High: $1,639.70
Weekly Low: $1,566.50
Friday Close: $1,593.90

Last week closed with gold spiking to a surprising high, surging 4.3% after weak U.S. economic data rolled in, including low employment rates and non-farm payroll reports. Last Friday, gold saw the biggest one-day increase in three years, prompting some investors to cash in those gains. The price of gold has been volatile the entire year so far, so when those investors fled the market, Monday opened with a slight pause as many wondered whether U.S. economic policy might ease in response to the negative economic news.

The price throughout the week remained fairly steady up until Thursday. India is the world’s largest importer of gold, and as Friday saw the rupee fall to an all-time low in relation to the dollar, Indian gold investors started selling when the price was high.

Yet, as the economic crisis in Europe continued to worry investors and weak U.S. data started filtering in, there was an equal balance of “safe haven” investing in gold. The pause occurred partly because much speculation abounded about whether the Federal Reserve would finally ease monetary policy. Continue reading →

Apr 30

Price of Gold Weekly Recap – April 23-27, 2012

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Monday, April 20 Open: $1,636.81
Low: $1,623.54
High: $1,667.30
Friday, April 27 Close: $1,664
Weekly Change: + 1.3%

This week saw gold prices begin with 2-week low and then end with a 2-month high. Monday held the week’s low in the afternoon, as the U.S. dollar stayed firm and crude oil weakened, then the exact opposite happened on Thursday, as the dollar started dropping and crude oil steadied, contributing to the rise in gold market values.

Tuesday, April 24th saw a slight spike in gold prices as India celebrated its largest gold-buying festival, Akshaya Tritivai. Though gold is traditionally bought in physical jewelry form, some of the younger, urban Indians are Internet savvy and prefer to buy gold in the form of exchange-traded funds (ETFs).

“Gold has become an asset class which is a must-have in many people’s portfolio,” said Gnananskhar Thiagarajan, the director at Commtrendz Research. Continue reading →

Apr 20

Weekly Gold Price Recap – April 16-20, 2012

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Monday April 16th Open: $1,651.30
Weekly Low: $1,635.10
Weekly High: $1,654.40
Friday April 20 Close: $1642.30

Gold prices have been on the downturn this week, lingering under $1,650 on Monday, dropping to $1,642. Gold prices have been following a slight but steady decline since late February, yet the price of gold stabilized on Thursday’s closing after several U.S. economic reports revealed that the American economy has not performed as well as expected in the past week. The gold market is unique because while most commodities markets may look forward to a booming economy, gold’s currency market actually hinges on its place as a hedge against economic downturn. Thus, when the economy seems to be on an upturn, gold prices fall. Continue reading →