Tag Archives: KITCO

Dec 16

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

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Monday Open: $1,234.30
Weekly High: $1,265.80
Weekly Low: $1,224.00
Friday Close: $1,237.50

Gold will end its 12-year bull run this year, analysts across the board conclude. After dropping around 20% since the beginning of the year, the yellow metal seems to have hit the end of its winning streak. Yet, despite short-term losses, many believe the price of gold has hit a bottom for the time being and still holds long-term staying power.

Monday’s gold prices remained fairly unchanged after the previous Friday’s bolstering U.S. jobs report, even gaining a few points. It was released on Friday that nationwide unemployment had reached its lowest level since 2008. Despite such news, gold did not respond in a significant way. This is one indication that the sellers may have all left the market.

One of the biggest price indicators for gold this year has been talk of the Federal Reserve ending its quantitative easing program on hopes that the economy is steadily improving. On Monday, President of the Richmond Federal Reserve Bank, Jeffrey Lacker, made a statement that the Fed will discuss bond tapering at its meeting next week. St. Louis Fed President James Bullard separately stated that he endorses a small December taper.

Despite this bearish news for gold, Tuesday actually saw price gains. This may mean that gold bulls are still optimistic. Many foresee that a few positive economic data points do not equate to long-term positive growth. This makes gold still a player on the field as an economic hedge fund. Forbes KITCO analysts also premise that gold may remain steady for the next 1-2 years but could gain momentum after that.

In other world economic news, on Wednesday Canadian gold miner IAMGOLD announced that gold prices were too low to pay dividends to their investors, so dividends are being suspended for the time being. On Thursday, Germany’s financial watchdog started an investigation into Deutsche Bank’s possible manipulation of gold and silver prices.

Gold investors anticipate next week’s Federal Reserve meeting for further clues about economic policies.

Dec 09

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

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Monday Open: $1,219.30
Weekly High: $1,248.90
Weekly Low: $1,212.50
Friday Close: $1,228.80

The gold market may be hitting a short- to medium- bottom. Despite many positive economic reports, gold didn’t flinch as much as might be expected.

Monday opened steady, with news about China potentially pulling back on their gold demand in 2014. Still, even though some analysts predict that China’s gold imports will drop 10% to 900 million tons, gold still clocks in as China’s second largest import and they surpass even India in gold demand.

Tuesday hit a five-month low by the end of the trading day ahead of multiple economic reports due out later in the week and an ADP report that showed a rise in employment for November. The drop, however, was tempered by a lower position of two key outside markets, oil and the U.S. dollar.

Wednesday regained Tuesday’s losses as bargain hunters entered the market. Overnight news brought a new element to the table: the OECD reported that inflation in the EU’s 34 member countries has been dropping dramatically. This means that bankers will likely keep a loose monetary policy so as to prevent deflation. This puts gold in a good position.

The price of gold fell again on Thursday, losing Wednesday’s gains ahead of the European Central Bank’s monthly monetary planning meeting and press conference.

On Friday, the U.S. employment report for November showed that the country added 203,000 non-farm jobs, higher than the expected 180,000. Unemployment also fell to 7.0%, the lowest it has been since 2008. Positive economic growth translates to poor performance for the yellow metal, and gold hit a fresh five-month low on the news. However, the price of gold rebounded fairly quickly and stayed steady, which indicates that a bottom may be near. Also to this point, the general sentiment in the gold market is that the U.S. Fed’s tapering program is very near, so prices are not changing as drastically as earlier in the year.

 

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 07

Price of Gold Weekly Recap – September 30-October 4, 2013

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Monday Open: $1,332.00
Weekly High: $1,335.00
Weekly Low: $1,283.30
Friday Close: $1,310.80

The U.S. government shut down was on the forefront of all world markets this week, including gold. Though the shut down does imply some bullish factors for the yellow metal, the volatility of the market proved to be bearish overall.

Monday exhibited a strong holding pattern for gold as the U.S. government hinted at a failure to come to compromise by the first of October. On this last day of the month, Monday, short-term trading held steady, as speculators imagined gold could shoot up as safe haven, or drop down on rampant uncertainties everywhere.

On Tuesday, October 1st, the U.S. government did indeed “shut down,” as lawmakers could not reach a conclusion to pass a budget. House Republicans have brought the Affordable Care Act to the spotlight, as they have purposefully left out funding for the program, which Senate Democrats have refused to pass. With U.S. politicking so volatile, the yellow metal took a turn for the worst on Tuesday. Gold acted more as a commodity than a currency on Tuesday as traders left the market to force gold into a seven-week low.

Wednesday showed some short-term recovery as others entered the gold market on bargain hunting, but no progress was made between the House and the Senate, so the price of gold stayed pretty steady until the end of the week. Economic reports due out Friday were not released since government employees were on furlough.

Thursday and Friday marked the third and fourth days of the U.S. partial government shut down. The price of gold stayed low, and the general feeling in the market place is one of extreme uncertainty, but not quite panic. There are signs that this shut down could be bullish for gold long term, since the drag on the economy may encourage the Federal Reserve to extend its quantitative easing program.

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.

Aug 26

Price of Gold Weekly Recap – August 19-23, 2013

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Monday Open: $1,365.60
Weekly High: $1,399.70
Weekly Low: $1,356.90
Friday Close: $1,396.50

This week proved fruitful for gold, as a few economic global events pushed the price range up slightly higher by Friday, despite selling off early in the week. Last week showed improvements for gold, jumping 13%, so after those dramatic gains in an otherwise uncertain trading realm, traders were eager to reap the rewards from the incline and sell off their shares on Monday, bringing the price of gold back down to $1,365.

Tuesday saw gold rise a little bit on some more safe haven demand and a lower dollar. Traders are keeping an eye on the situation in Egypt, as this global crisis could push people back into desiring the hedge fund of gold. Other items of interest this week were the FOMC minutes released on Wednesday and Chinese manufacturing data released on Thursday.

Wednesday’s prices remained near steady as the FOMC released minutes that proved no real surprise to gold traders. With the expectation that the Federal Reserve would be soon employing their “tapering” program to end low interest rates, gold traders are cautious, but the meeting on Wednesday revealed no concrete time frame for when this would happen.

Because of the lack of news from the FOMC, Thursday’s prices remained steady with slight gains. The increase was also influenced by the manufacturing reports released on China’s economy, which had shown improvement. China is the world’s second largest buyer of gold, so a flourishing economy is bullish for the yellow metal.

Friday ended the week on a fairly sharp incline, probably influenced by the subtly bullish factors piling up throughout the week. These gains could spill over into 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 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 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.