Tag Archives: price of gold

May 27

Price of Gold Weekly Recap – May 20-24, 2013

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Monday Open: $1,393.70
Weekly High: $1,398.30
Weekly Low: $1,360.70
Friday Close: $1,383.90

Still prevalent on gold investors’ radar is how the Federal Reserve may be scaling back their quantitative easing program. This concern factored heavily into the ups and downs of the yellow metal this week.

Monday opened fairly higher to correct the seven-day loss streak from the previous week. Midday Moody’s announced that if the U.S. could not correct its budget and deficit problems by the end of 2013, the credit rating agency may downgrade its credit rating. Gold sparked higher at about this time.

Tuesday saw gold move up past its initial morning low after Federal Reserve at St. Louis President James Bullard announced his recommendation that the FOMC should not completely cut its bond-buying program and instead scale it back if need be. There have been indications from the Federal Reserve that this year may be the end of its quantitative easing (QE3) program, which would be dramatically bearish for gold.

Fed Chairman Ben Bernanke made an announcement on this point on Wednesday, perhaps confusedly remarking to both sides. He stated that he was still fully in favor of the QE3 program, but later answered a question to the effect that the next few months may see a tapering of policies. The gold market responded more strongly to the latter statement, dropping down to the week’s low.

With the low price from Wednesday, Thursday saw traders selling off in risk aversion, as well as a resurgence of safe haven buying. Friday trading was quiet, perhaps in anticipation of the U.S. Memorial Day weekend.

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 14

Price of Gold Weekly Recap – May 6-10, 2013

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Monday Open: $1,462.00
Weekly High: $1,474.40
Weekly Low: $1,423.70
Friday Close: $1,444.10

Gold showed a pretty slow week between May 6 and 10, unable to break above technical price barriers. Monday began the trading week with slight gains based on the still-strong demand for physical gold and a weaker dollar.

Tuesday slumped down to $1,450. The name of the game Tuesday was equities, as traders had a risk-on mentality and turned to taking profits to invest in equities, which were at an all-time high. The dollar was also stronger Tuesday.

Wednesday saw the gold market improve a little from some short covering and better economic data from China and Europe. Since Tuesday’s prices dropped to a low, some traders took advantage of this and jumped in the market. The dollar was also weaker in the middle of the week.

Then, as soon as the price of gold makes some gains, it drops back down again. Thursday experienced some selling pressure and technical corrections from the previous day. Friday saw gold hit a two-week low, concurrently with Thursday night’s two-week high for the dollar. Certain unfounded rumors circulated Thursday night that indicated the Federal Reserve would put an end to its quantitative easing program soon, a rumor that is no good for gold. The bears are currently in the long-term technical advantage.

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.

Apr 29

Price of Gold Weekly Recap – April 22-26, 2013

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Monday Open: $1,426.30
Weekly High: $1,482.40
Weekly Low: $1,412.70
Friday Close: $1,457.30

After last week’s drastic losses, gold has been making a strong recovery this week because of one primary reason: people are taking advantage of gold’s low prices and stocking up on physical bars and coins, especially in Asia and India. The physical demand for gold has offset some of the major losses incurred last week by stop-losses, U.S. economic recovery and the mass exodus of the market.

Monday opened the week with little movement. Tuesday saw a demand for physical demand start to grow very strong in India, as the low price of gold is coinciding with the anticipation of the Indian wedding season and the gold-buying Akshaya Tritiya festival in the middle of May. India is the world’s largest consumer of gold, so people are swooping in now while prices are low, thereby increasing demand and interest in gold. This demand helped rebalance the bearishness of gold’s position and counter the general skepticism in the gold market.

Some analysts believe that last week’s price fall was the bottom of the gold market, with gold prices set to return to higher trading levels on a cyclical rebound. A few global factors mildly influenced the price of gold this week, including the sharp drop of the yen against the dollar and the Japanese stock market, a new low for U.S. Treasury bonds and a record low of German bonds. These economic factors increased interest in gold as a hedge fund, and Wednesday and Thursday’s rise in the price of gold reflected this return.

A report from the International Monetary Fund also reported this week that Russia, Turkey and some Asian nations had increased their country’s stores of gold during the first quarter of the year, not taking into account April’s drop. Thursday also reported Spain’s higher-than-expected unemployment rate and the slight slippage of the U.S. dollar, contributing to renewed interest in the yellow metal.

So far, gold is experiencing a strong rebound, supported by a high demand for physical gold across the world. Small coins and bars are very popular right now, with American Gold Eagle coins leading the pack.

Apr 22

Weekly Gold Price Recap – April 15-20, 2013

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Monday Open: $1,360.00
Weekly High: $1,416.50
Weekly Low: $1,331.80
Friday Close: $1,401.00

The gold decline that has been ravaging the market in the past few months, and weeks especially, hit a 2-year low on Monday. From the safe $1,550 to $1,600 range, the yellow metal has been steadily declining, and dropped all the way down to $1,330 this week. This was one of the most devastating and dramatic sell-offs that Wall Street has ever witnessed, and the strange part is that no one is exactly sure why it happened. Ever since gold dropped from its mighty $1,700 position last year, a series of automatic stop-losses has been intermittently bringing the price of gold down. If this drop was due to an automatic price sell-off, it was the biggest one yet.

Other theories as to the price decline include fears of central banks selling off their gold, especially Cyprus, ETF liquidation, global deflation, a strengthening dollar, and other, mysterious hedge funds replacing the safe haven nature of gold. Whatever the cause, or combinations of causes, there were no prominent external factors that contributed to the major price drop that occurred over the weekend and culminated Monday in a sudden 10% decline, more than $200 an ounce. Mostly, analysts attribute the tidal wave of traders exiting the market to “panic selling.” When the price starts to drop, as it did on Friday, hoards of people decide to play the money game safe by protecting their losses.

The rest of the week’s gold news paled in comparison to Monday, and most trading was done simply in recovery from the unexpected price drop. Tuesday regained some strength in short-covering, bargain hunting and a strong demand for physical gold. Since Monday, the price of gold only steadily increased, and a large part of this recovery is due to buyers in Asia, as well as the rest of the world, taking advantage of the low price of gold and buying physical stores in bulk.

The Boston Marathon bombing last week also contributed to already frayed nerves, but by Friday, the day when the one remaining suspect was taken into custody, the price of gold had rebounded to just above $1,400. For all the chaos that occurred on Monday, the gold market had stabilized once again by the end of the week.

Apr 15

Price of Gold Weekly Recap – April 8-12, 2013

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Monday Open: $1,572.70
Weekly High: $1,587.20
Weekly Low: $1,488.30
Friday Close: $1,488.30

Monday opened this week on a strong foundation, but headed toward a drastic 15-month low by the end of the week. The beginning of week floated goal at a pretty steady level, solid from last Friday’s lower-than-expected U.S. economic reports, as well as stimulus reports issued by the Bank of Japan and the still-weak European economy. North Korea is still a wild card and having mild effects on the market.

Tuesday experienced virtually no change in the price of gold, as the market waited for fresh external factors to influence any price changes. There were a few bargain hungers entering the market, but most of the day was spent in anticipation of the Federal Reserve’s minutes on Wednesday.

On Wednesday, gold investors were speculating about how the Fed would handle the recent dips in economic progression, suspecting that the easy monetary policies would remain unchanged. The report was released to the slight dismay of gold bugs; it was slightly bearish because it revealed that the Fed was debating internally when to end the current policies, which means stricter rates may be very near on the horizon. Gold took a dip for it.

Thursday rebound as new blood entered the market after Wednesday’s sharp exodus. The market price of gold stayed fairly level, but news issued by Philadelphia Federal Reserve President Charles Plosser may have had an impact on the severe price drop that occurred on Friday. Though not a voting member of the Federal Reserve, Plosser issued a statement that the Fed would be changing its policies by the end of the year. Concurrently, the dollar and the Japanese stock market hit a high, which is also bearish for gold.

The reason for Friday’s dramatic slip in price was the automatic triggering of stop-losses when the price of gold reached below last week’s strong $1,539 levels. No external factors were the cause of the new 15-month low. It is a trend that has been occurring lately: traders are setting reference points to get out of the gold market, causing increasing downfalls in the selling price.

Apr 08

Price of Gold Weekly Recap – April 1-5, 2013

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Monday Open: $1,598.80
Weekly High: $1,602.70
Weekly Low: $1,542.80
Friday Close: $1,579.70

Despite continuing turmoil in North Korea and a few other global economic factors that might boost the price of gold as a safe haven, the yellow metal didn’t fare well this week. By mid-week, gold had hit a 10-month low, but gained enough to close the week in the $1,550 to $1,600 range.

Monday was a slow trading day due to the Easter holiday, but gold still took a modest gain from a weak dollar index and some safe-haven buying in response to the escalating conflicts in North Korea. The U.S. also released some economic reports from the manufacturing industry on Monday, which were lower than expected, also adding to the slight gains.

By Tuesday, however, the price of gold started to deteriorate and continued to plunge through Wednesday. No significant external price factors caused this tanking; heavy chart-based selling and automatic sell stop orders accounted for the sudden shift. General economic gains across the developed world may have a long-term impact on the lessening of interest in gold. Surprisingly, conflict in North Korea has not led to droves of demand for the safety of gold. Wednesday’s price point was a fresh 10-month low.

Thursday remained primarily unchanged, though a weaker dollar index pushed the price up to keep it around a level $1,555. Gold traders are tending to sell of their Exchange Traded Funds (ETFs) in the gold market, according to reports on the first quarter of 2013. However, some bargain hunters are also entering the market to pick up physical gold.

Gold took a slight boost on Friday as weak U.S. employment data hit the news stands, indicating that the Federal Reserve will most likely not change their loose monetary policies anytime soon. The week’s dip in prices is also leading to increased interested in physical gold, especially in India and China.

Mar 25

Price of Gold Weekly Recap – March 18-22, 2013

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Monday Open: $1,605.80
Weekly High: $1,615.90
Weekly Low: $1,604.60
Friday Close: $1,607.90

Gold stayed in a fairly limited trading range this week, but exhibited holding strength amidst some economic woes in the European Union. It was an overall good week for gold bugs, with a few new price highs and a slight advantage by Friday.

Monday started out fairly slow, trading above the $1,600 level and marking a fresh 3-week high. News in Cyprus has brought the European sovereign debt crisis back to the forefront of the global stage. The Cyprus government has decided to tax savings account plans in their domestic banks as a way to resolve some of their debt with the European Central Bank and International Monetary Fund. In addition to angering Cyprus residents, this move has sparked fears throughout the rest of Europe that other countries will soon follow suit. This crisis is bullish for gold as traders see the precious metal as a safe haven to unstable economies. Monday made modest gains.

Tuesday continued to send gold upwards to a new 3-week high, as the Cyprus situation increased safe-haven demand. Cyprus banks were closed this week as the government reconsiders the tax plan.

Wednesday brought the week’s anticipated Federal Reserve statements. As expected, the Fed is making no changes to their current monetary policy, but due to previous meetings and tentative indications of change, some analysts believe the Fed is subtly inching toward revving up interest rates as the economy improves. The FOMC meeting notes were modestly bearish and Wednesday closed lower.

Thursday saw gold prices hit the week’s third fresh 3-week high. The risk-off trading from Wednesday rebalanced as others saw the chance to jump in the market. As Cyprus’s crisis continues, gold maintains a steady rhythm of safe haven demand. More weak European Union economic data came out Thursday, prompting the hedge fund attitude even more, and the world is now watching North Korea, as the country has made threats to Japan. Crisis in this realm of the world could also send more people to take refuge in gold.

Friday dropped a little on profit taking, but ended the week a little higher than it began. The Cyprus questions continue into next week.

Mar 18

Price of Gold Weekly Recap – March 11-15, 2013

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Monday Open: $1,580.40
Weekly High: $1,596.90
Weekly Low: $1,579.40
Friday Close: $1,591.90

After last week’s uneventful run for gold, this week provides a positive contrast. The middle of the week hit a two-week high and gold speculators are now wondering whether the yellow metal will push through the $1,600 roof soon.

Monday’s stayed relatively flat, but Tuesday saw gold jump up in response to a European Central Bank official announcing that the region is not quite out of its sovereign debt crisis. Jens Weidmann, Bundesbank chief, addressed the public both Tuesday and Wednesday to relay the message that he sees no end to the crisis in sight, and European governments are “not giving clear direction.” This fresh fear rallied gold through into Wednesday.

Thursday morning’s gold prices responded negatively to a strong dollar, and dipped due to profit-taking from investors capitalizing on the high from Wednesday. But the yellow metal reached even greater heights by the end of the business day as bargain hunters swept into the market to buy at the lower price point.

There had been some speculation this week about whether central banks are manipulating the set price of gold to keep it low and bolster their own currency after the recent Libor scandals in London. Three central banks are now paying $2.5 billion in penalties for manipulating the London interbank offer rate. A dozen more are under investigation. The Commodities Futures Trading Commission, the agency responsible for revealing the scandals, is now also considering investigating these banks’ relationship to the price of gold.

A London Bullion Market Association spokesperson maintains that the price of gold is set based on supply and demand, and not advantages to central banks. “It’s nothing like Libor,” this spokesman said.

Friday closed very near the $1,600 level. Next week, gold investors can look forward to a Federal Reserve meeting for further indication of gold prices. In a Kitco gold news survey, 17 of 25 respondents expect to see prices go up next week.