Tag Archives: gold volatility

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.

Jan 11

Price of Gold Weekly Recap – January 7-11, 2013

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Monday Open: $1,658.90
Weekly High: $1,678.90
Weekly Low: $1,646.10
Friday Close: $1,660.30

Gold’s begun the year on a volatile sprint toward an uncertain future. Just barely adding one more notch on a twelve year upward trend at the end of 2012, the precious metal spent this week gaining and losing momentum by turns. After the Federal Reserve’s hints at lessening quantitative easing last week, the market has been shifty, though no real news has broken. The change in the price of gold from the week’s beginning to end is negligible, hovering around $1,660.

Monday opened the markets to hit the week’s low after traders were still processing the Fed’s minute’s from last week. The $1,645 level gold hit is the lowest since mid-August 2012, and it continues a six-week downturn. However, regarding the Fed’s foreshadowing, it’s not overly likely that the Fed will change its policy anytime soon. Some of the weightiest names in the Fed – ChairmanBen Bernanke, Vice Chair Janet Yellen and New York Fed President William Dudley – aim to retain the status quo. Furthermore, some of the world’s most prominent investment strategists, including PIMCO’s Bill Gross and DoubleLine Capital’s Jeffrey Gundlach, do not expect to see the Fed changing tactics in the near future.

Tuesday rebounded a little bit to eke its way over the $1,650 mark. Wednesday swayed up and down around that range, ending a little higher on a dipping dollar. There weren’t too many external circumstances to affect the price of gold this week, though traders are waiting to see what U.S. lawmakers will do next, and hinging on fresh economic data from China ahead of the Chinese New Year. Usually, the Chinese New Year is a great time for gold, but this year’s gains are uncertain.

Thursday saw a gold rally after the European Central Bank meeting, in which it was decided that low interest rates would remain unchanged. The Bank President related to his constituents a positive outlook for economic growth. The Bank of England will not expand its quantitative easing program.

From the nearly $1,680 high of Thursday, gold plummeted back down to Monday’s levels on Friday, largely due to fresh economic data from China. The Chinese consumer-price-index flew up 2.5%, ahead of economists’ expectations, indicating higher inflation. The fear for gold is that the Chinese government may enact cautionary measures against inflation, tightening economic policies.

The jury is still undecided on the future for gold, but only time will tell whether 2013 will prove to be the end of gold’s bullish journey or whether the yellow metal has just been getting over a slump toward even greater heights.