Tag Archives: price of gold

Dec 07

Price of Gold Weekly Recap – December 3-7, 2012

Posted on by

Monday Open: $1,717.20
Weekly High: $1,717.20
Weekly Low: $1,686.30
Friday Close: $1,702.80

It seems like the only thing gold investors could talk about this week was the upcoming fiscal cliff, a threat that sunk the price of gold to its lowest in four weeks, plunging the price down below $1,700. The price of gold stayed low all week but managed to dip up slightly about the $1,700 mark on Friday.

Negotiations about the fiscal cliff continued this week, but Democrats and Republicans are still undecided about how to approach the looming crisis. If an agreement is not reached by Jan. 1, automatic tax increases and spending cuts from the Bush era will go into effect. Economists believe this might send the U.S. back into a recession. Though it seems likely that politicians will indeed reach some sort of last-minute conclusion to avoid a recession, the uncertainty surrounding the matter is a drain on many markets, gold not excepted.

Monday dropped about $15, then Tuesday took a net drop of around $20, next to hit Wednesday’s low of around $1,685 – the lowest in a month. Thursday stayed fairly flat.

This week was primarily led by economic speculation as to the U.S. government’s policies regarding the fiscal cliff, but investors also looked forward to Friday when the Labor Department would release employment data for November. And indeed, Friday moved prices up a little bit.

December 10-12th is also a series of days to look forward to for gold traders, as it is the FOMC’s next annual open market meeting, in which they will discuss QE3 policies. After this past September when the Fed eased up on monetary policy, to the delight of precious metals investors, many expect that they will continue to enact policies to boost the economy, which in turn will bolster gold as a safe haven. “Operation Twist” will come to an end, a program in which the Fed sells $45 billion of short-term treasuries each month in order to buy long-term treasuries. Most do not think the Fed will continue Operation Twist, instead most likely opting to engage in a conventional bond-buying program, which would increase money-printing, inflation, and thus the confidence in gold.

Goldman Sachs predicts that the slow U.S. economic growth will force the Fed to keep printing more money for the next two years, a positive sign for gold.

Considering the volatility that gold is facing right now, some are questioning the reality of the yellow metal as a true safe haven. Still, in a Kitco survey, out of 24 respondents, 15 see prices moving up next week and 5 see prices going down, with the rest neutral.

Nov 30

Price of Gold Weekly Recap – November 26-30, 2012

Posted on by

Monday Open: $1,750.10
Weekly High: $1,751.80
Weekly Low: $1,709.90
Friday Close: $1,714.70

Gold took a striking dip mid-week but regained losses to end the month with slight gains for November. Still hovering in the $1,700 to $1,750 range, Wednesday was the most peculiar day of the week with a quick plethora of nearly unaccounted for sell-offs, but this still did not force the price down below $1,700.

Monday opened solid and stayed solid. Low volatility in all commodities markets did not affect the price of gold.

Tuesday took a slight dip from further announcements in the U.S. regarding the fiscal cliff approaching at the end of the year. If Democrats and Republicans don’t reach a fiscal agreement by December 30, an automatic $600 billion tax hike and spending freeze motion will go into affect, which could spur the economy into a recession. House of Representatives speaker John Boehner said no substantive progress has been made. However, the little amount of trading on gold due to this news indicates most gold traders believe the crisis will be resolved.

In Tuesday’s European news, a decision was made regarding Greece’s bailout money. Greece will receive a loan with the stipulation that the country will cut its debt/GDP ratio to 124% by 2020. This agreement is likely to raise the value of the euro.

The marketplace didn’t respond to either of these events on Tuesday, but Wednesday morning, one minute after trading opened, a massive sell-off occurred in gold, dropping the price nearly $30 in less than five minutes. Both the U.S. fiscal cliff and Greece’s bailout are bearish for gold, which could reasonably cause a decline in price, but the real impetus for such an immediate loss is the high volume of “sell stop” orders. These orders are automatically programmed to sell off shares once a certain price is reached – in this case, $1,730 for many traders. The bearish pull-out of the market accelerated these automatic sell-stops to result in a drastic price drop for gold, which landed at the lowest price of week, $1,710.

Dave Meger of Vision Financial Markets, pinpointed a new sell-stop number: “The new number to focus on is $1,692—that’s the 100-day moving average,” he said.

Still, the strong selling pressure on Wednesday, which caused quite a buzz, didn’t last. Gold rebounded on Thursday from bargain hunting and short covering. The Wall Street Journal reported on Wednesday that the December FOMC meeting is likely to produce more economic stimulus, which is positive for gold. The dollar was also lower on Thursday.

Friday ended lower again, the price of gold influenced by events earlier in the week that may have made traders skittish. Still, November ended with modest gains.

Nov 23

Price of Gold Weekly Recap – November 19-23, 2012

Posted on by

Monday Open: $1,729.90
Weekly High: $,1751.90
Weekly Low: $1,722.20
Friday Close: $1,751.90

It was a fairly quiet week for gold, with a few economic indications in the U.S. and Europe not doing much to fluctuate the price, though the yellow metal had a lift at the end of the week.

Monday’s trading started out bullish on a weak dollar and higher crude oil prices, combined with positive economic news in European and Asian markets. Also, President Obama gave indications that the fiscal cliff crisis is likely to be solved before the end of year.

In the Middle East, tensions were high between Israel, Egypt and Iran, but this didn’t downgrade the metal in any significant way. Geopoliticizing tensions tend to promote first a sluggishness in gold trading at first, but if they escalate, consequently they promote a rush toward gold as a stabilizing investment.

Tuesday saw pretty much all of Monday’s gains pull back, as the Middle East experienced further rifts. Ben Bernake, Chairman of the Federal Reserve, made an announcement that the fiscal cliff crisis still looms ahead unresolved, but gold only lowered slightly. Even if the fiscal cliff does pass without action, gold may be positively affected as a safe haven in an unstable economy.

Euro zone officials held a meeting on Tuesday to discuss Greece’s debt bailout, but reached no agreement, which did little to affect the price of gold except lower it slightly on continued feelings of uncertainty. Wednesday was a slow trading day ahead of the U.S. holiday weekend. In Middle Eastern news, Israel and Hamas reached a cease-fire agreement, which also affected gold little.

U.S. markets were closed Thursday for Thanksgiving and early Friday morning, so only a hush was heard on the gold front. Friday saw a fairly significant jump up about $20 from a weaker dollar, and, presumably, anticipation of Black Friday sales data.

Next week, the Israel-Hamas conflict, the Greek bailout and the Federal Reserve’s actions concerning the fiscal cliff will all be factors to monitor.

Nov 16

Price of Gold Weekly Recap – November 12-16, 2012

Posted on by

Monday Open: $1,736.80
Weekly High: $1,736.80
Weekly Low: $1,708.30
Friday Close: $1,713.70

Gold faced a pretty steady downturn all week long in response to economic uncertainty across the board. Major factors leading to the average $20 loss this week included the U.S. fiscal cliff problem that looms on the horizon, continued European debt and a slow buying season in India.

However, gold has stayed over the $1,700 mark since the beginning of November and many are still predicting a climb above $2,000 in 2013.

Monday was a slow trading day in the U.S. since it was Veteran’s Day, and the price didn’t move much. In overseas news, Greece is undergoing fresh economic stimulus after a conference on Sunday, leading to new austerity measures. China faced unexpected growth, and Japan’s economic data points to a near recession, which would be a positive sign for gold.

Tuesday began the slow path downward as disagreements arose among the European Union as to when to disperse Greek’s bailout money. European economic woes put a damper on raw commodity markets, including gold. Meanwhile, in the U.S. Democratic and Republican parties are at a standstill as to how to deal with the upcoming fiscal cliff by the end of the year. If a decision is not made by December 31st, the automatic spending cuts and tax cuts established by the Bush administration will go into effect. The uncertainty here is already showing a volatile effect on gold, but the upside is that it could make the yellow metal seem even more a safe haven.

No real price changes happened on Wednesday, despite two conferences held in the U.S. – Obama addressed the fiscal cliff and the FOMC held their regular meeting, in which they discussed methods of determining when to raise interest rates. The implication is that they will continue their current monetary policy until 2013.

Thursday saw gold take a dip on the continued worries over the fiscal cliff and Eurozone, in which it was revealed that 17 countries are now in a recession. The technical definition of a recession is when a country experiences two consecutive quarters of economic contraction.

Friday continued the four-day dip on a slightly weaker dollar and no fresh news on any of the economic issues. This week was also the beginning of festival season in India, but buying is slow there due to a late harvesting season and the high price of gold. Next week will be fairly slow as the markets will be closed for Thanksgiving. Still, some see gold gaining from the fiscal cliff worries.

Nov 02

Price of Gold Weekly Recap – October 29-November 2, 2012

Posted on by

Monday Open: $1,710.50
Weekly High: $1,726.50
Weekly Low: $1,686.20
Friday Close: $1,686.20

Gold traded very lightly this week, mostly due to the closure of the New York Stock Exchange on Monday and Tuesday in light of Superstorm Sandy. Some U.S. economic reports released later in the week accounted for the sustained dip below $1,700 that closed the market on Friday.

Hurricane Sandy ravaged the East Coast, causing the first shutdown of U.S. stock markets due to weather in 27 years. No trading occurred Monday and Tuesday as energies were focused on mitigating the effects of the storm, but the Exchange opened smoothly again on Wednesday morning.

This week, economic reports from the U.S. on Friday and from China on Thursday were the causes of anticipation amongst gold stock traders. Wednesday was mostly a bargain hunting day as some joined the market after the dip, but it was still quiet after the recovery of the storm. Positive talks of Greece emerging from the eurozone also caused slight upward movement.

Other national banks have indicated economic stimulus this week, including the Bank of Japan, which continued its asset-buying trend and increased their stores by the equivalent of $137 billion. China’s economic data released on Thursday revealed better than expected growth in manufacturing, which translates into positive news for the precious metals sector, causing slightly higher trading Thursday.

The dip in the week occurred on Friday. U.S. economic reports released on Friday morning revealed unsettling news for gold, causing a drop of $40, the largest loss in four months, to nosedive below $1,700. Payroll data showed numbers higher than expected for October, translating into less pressure on the Federal Reserve to continue easing monetary policy. In October, employers in America added 171,000 jobs and factories expanded by 4.8%, both higher than forecasts predicted. The dollar also rose the most since July 20th, creating less incentive for investment in the safe haven of gold.

Also on the horizon is the U.S. presidential election on November 6th, which could change the course of gold depending on the elected President’s policies. Based on a survey by Bloomberg, gold is still bullish. 18 of 27 analysts expect to see gold rise next week, four were neutral and five were bearish.

Oct 26

Price of Gold Weekly Recap – October 22-26, 2012

Posted on by

Monday Open: $1,729.50
Weekly High: $1,729.50
Weekly Low: $1,699.50
Friday Close: $1,1712.00

The gold market was pretty quiet this week, taking a few ups and downs based on market pressure, a Federal Reserve meeting and continued expectations about global stimulus measures. No major price shifts occurred; instead, gold operated within a pretty stable trading range, only dipping slightly below $1,700 midweek on Fed fears, but quickly regaining to the above $1,700 range. The major news this week was a statement released by the Federal Reserve that confirmed stimulus measures but did not announce any new policies.

Monday and Tuesday’s trading were basically fear-based sell-offs anticipating the Fed’s statement, compounded by a stronger dollar and outside markets. There was not great anticipation for the Fed’s meeting minutes, and economists generally didn’t expect any fresh stimulus measures, but there was a slight fear that since the dollar has been performing well lately, the Fed could decide to pull back their monetary easing at any time.

The euro dropped Tuesday as Moody’s downgraded Spain’s credit rating once again and reports said Spain’s economy contracted .4% more than last quarter. The dollar was also trading higher on Tuesday as gold hit a new 6-week low.

Once the Fed statement was released on Wednesday, gold jumped about $7 on the news that the Fed will be continuing its economic stimulus measures. However, it dropped all the way below $1,700 a few minutes later, after people had time to read through the FOMC minutes. The Fed reiterated its plan to stick with zero percent interest rates until 2015, despite gains already perceived in the housing sector.

Thursday saw gold rise on expectations that the bank of Japan may be considering stimulus measures, a rising euro and anticipation of the wedding season in India, which begins mid-November.

Friday was a slow day in the market, characterized by risk-off trading before the weekend. France got their credit score downgraded and Greece faced fresh economic woes; the gold season has started in India; and the U.S. reported slight gains in economic growth, strengthening the dollar.

Significantly, news has been traveling that Ben Bernake would probably not be running for office as Federal Reserve chairman for another term even if President Obama is reelected. This causes some concern for gold bugs, as Bernake is central to keeping interest rates low, an asset for gold.

“Without Bernanke, monetary stimulus from the Federal Reserve could be greatly reduced, and that will weigh on the price of gold,” said Jeffrey Sica of billion-dollar investment agency SICA Wealth.

The U.S. presidential election weighs in on many traders’ buying patterns, along with the anticipation of a “fiscal cliff” as it is being called: if Congress doesn’t solidify a debt reduction plan by the end of the year, a series of automatic spending freezes and tax increases will be enacted.

Oct 19

Price of Gold Weekly Recap – October 15-19, 2012

Posted on by

Monday Open: $1,737.30
Weekly High: $1,752.20
Weekly Low: $1,718.00
Friday Close: $1,720.80

Gold opened on a one-month low this week, rallied upwards, then shot back down to close bearishly on a newer one-month low due to global economic pressures. There are a few global factors that contributed to the spikes this week, but as a whole gold is still operating at roughly $200 higher than the $1,500-$1,550 range that dominated most of the first half of 2012.

In a weak global economy, gold acts as a hedge fund and has been on the upswing for the past four years, largely due to economic restructuring of major economic states, not least of which has been the U.S. Federal Reserve’s easy monetary policies. Monday, however, China was on the forefront of traders’ minds, and gold dipped down from the weekend because data revealed that China, whose growth has been slow over the year, though still significantly ahead of the U.S., might not be considering economic restructuring if they can help it. Gold has risen in the past few months in large part due to America and Europe’s monetary loosening, and the same has been expected for China, but September data showed that China’s inflation rate dropped from 2% to 1.9% and their imports grew by 2.4%. This means uncertain trading for gold.

“The bottom line is China’s in this kind of gray area where…things aren’t as good as people want them to be but they’re not bad enough to continue to just throw money at the market,” Matt Zeman of Kingsview Financial said.

Tuesday, gold responded well after the U.S. released positive news on consumer price data, confirming that there is no current threat of significant inflation. If inflation were to appear on the horizon, the Federal Reserve may change their policies to curb price hikes, which would negatively affect gold. Without immediate fear of inflation, the Fed can continue its trend of monetary easing. The dollar also slipped a little compared to other currencies.

However, Wednesday reports on U.S. housing data served to balance out any permanent feeling of comfort regarding the dollar. Housing data was positive, implying that if that trend continues, the Fed may start to slow down their stimulus plans. Spain also received some important news; the struggling country’s credit rating was left unchanged rather than downgraded, and there is still talk of Spain requesting a bailout. Germany also joined the conversation by announcing a lower economic growth rate for 2013 than previously anticipated.

Gold traders anticipated Thursday as results from China’s third-quarter gross domestic product would be released and the European summit would begin. Data from China on Thursday confirmed the foreshadowing from Monday that China may not be as strongly considering economic boosting, since the outlook is good for economic growth.

Friday dropped gold back down below the initial trading point on Monday to a fresh one-month low. The dollar was trading higher on Friday, and the European summit meeting ended, revealing no news from Spain that the country would be asking for a bailout now. Economic uncertainties in all parts of the world contributed to an overall precarious feeling for unconvinced gold traders, causing many to flee the market by the end of the week.

Frank McGhee, precious metals trader of Integrated Brokerage Services LLC, put it this way: “People who rushed in for QE expecting to get a significant lift are getting out of the market.  The longer we don’t make a new high, the more people start getting nervous about where gold is trading.”

This week experienced a 2% drop in gold, the largest weekly decline in four months.

With noncommittal leaders in Spain, a U.S. election on the horizon, a stronger Chinese economy and the season for gold buying in India approaching, yet with a weak rupee, gold seems to be caught once again in a trading limbo. However, once the price of gold breaks $1,800, interest in this precious metal will surely return, as many investors see the yellow metal continuing to perform well in the long-term.

Oct 12

Price of Gold Weekly Recap – October 8-12, 2012

Posted on by

Monday Open: $1,775.50
Weekly High: $1,775.50
Weekly Low: $1,754.10
Friday Close: $1,754.90

The price of gold this week fluctuated about $30 due to continuing uncertainty about the European debt crisis and the future of U.S. economic policy. Monday celebrated the American holiday of Columbus Day, so trading took a pause. There was slight risk-off trading, but the marketplace was quiet until Tuesday.

The yellow metal dropped about $10 on Tuesday after the International Monetary Fund lowered its predictions for world economic growth from 3.5% to 3.3%, reporting that the world’s industrial economies are at risk for a prolonged recession. Another reason for the drop on Tuesday was the ongoing conversation about Spain’s economic crisis, and uncertainty whether Spain really will ask for a bailout. After two days of meetings with eurozone finance ministers, no conclusion was reached and rioting continued in both Spain and Greece.

Last week, U.S. unemployment data revealed better than expected numbers, reporting that unemployment had dropped to 7.8%, so there is also some uncertainty for gold in this arena. Even though gold took a high turn a few weeks ago after Federal Reserve Chairman Ben Bernake agreed to third quarter quantitative easing, there is no guarantee how long his looser economic policies will last; the low interest rates and mortgage incentives are in place only until the U.S. labor market can show significant improvement.

Still, gold hovered in the upper $1,700 range this week. Wednesday was a general day of trading limbo, as some traders decided to sell off to reduce risk amid economic uncertainty, but the price remained fairly steady.

Thursday saw a slight jump for gold when U.S. economic data reported slightly higher jobless claims. Spain also had their credit score knocked down two points by credit rating agency Standard & Poor, but surprisingly the euro did not respond, and many continue to be optimistic that Spain will opt for a bailout.

It seems as if the U.S. if the major indicator of gold’s track upward or down, even though European and Chinese economies definitely play a hand in the cards. Still, the Fed’s decision to loosen monetary policy has been the singlemost significant factor for gold this year.

Stock market analyst Tom Kendall of Credit Suisse said, “Gold is going to take its biggest cue, as it has for the most recent past, from what happens in the U.S. in respect to the strength of the economic recovery and what that means for monetary policy.” He went on to say that it is fairly hard to predict the effect U.S. joblessness claims will have on gold now due to seasonality.

To recap the year so far, gold has risen about $215, or 13%, in 2012 with a majority of those gains, $165, occurring in the pas two months due to Fed monetary policy. Friday ended slightly lower but fairly quietly in trade-off anticipation of the weekend. Most polls show an even split as to how gold will perform next week.

Sep 28

Price of Gold Weekly Recap – September 24-28, 2012

Posted on by

Monday Open: $1,764.50
Weekly High: $1,782.50
Weekly Low: $1,739.00
Friday Close: $1,774.70

 

Gold stayed in a pretty neutral trading range this week with a slight dip occurring in the middle of the week. Some investors expected gold to break the $1,800 bubble this week, but it didn’t happen; instead, gold experienced some trade offs and a reaction to the European financial dilemma in Spain.

Monday opened slightly lower after investors started taking profits over the weekend in response to news of lower crude oil and grain prices. Tuesday saw gold holding strong despite positive U.S. economic data, most likely because of the breakthrough news a couple of weeks ago that the Federal Reserve would be implementing some new fiscal policies that would inevitably boost inflation, and therefore a safe haven in gold. So, even with slight bursts of good news for the dollar, employment or the housing market, gold has the Federal Reserve’s policies to lean on for growth.

The dip that occurred on Wednesday was a risk-off move by traders responding to protests in Spain and Greece against the countries’ austerity measures, a sign that the European debt crisis is once again on the world economy’s radar. There are some worries that the European Union may back down from some of the policies reached during the summer.

Yet, Thursday took a U-turn upwards when Spain announced a new program of spending cuts and tax increases, indicating they may want to borrow money from neighboring economies. For a long time, speculators have been waiting for Spain to ask for bailout money from the European Central Bank, and some see this is a positive sign. This pushed gold up $26.80.

Additionally, China is not necessarily thriving, and many hope that China will embark on economic measures to boost its economy. The bottom line is that no powerhouse world economy has a strong currency right now, and this is the number one reason why gold is reaching the heights that it is.

“If you put together stimulus on three continents … that’s a good inflationary outlook,” George Gero, of RBC Global Futures, said.

Finally, gold ended the week a little lower due not to external forces, but to a wrapping up of the week and the third trading quarter. Investors took their gains from a lucrative quarter, which experienced a tremendous growth of 11% in the July through September period. This was the yellow metal’s biggest quarterly gain in two years, largely fueled by Fed policies.

Sep 21

Price of Gold Weekly Recap – September 17-21, 2012

Posted on by

Monday Open: $1,762.50
Weekly High: $1,786.70
Weekly Low: $1,755.30
Friday Close: $1,773.00

Coming off of last week’s immense gains, gold showed considerable strength this week, staying in the $1,750 – $1,780 range and then jumping to its highest peak of 2012 on Friday. Last Thursday gold reached the highest price of the previous in six months after the Fed announced further monetary easing in order to curb unemployment, and this week, it was upon speculation that Spain, a country already unstable financially, might reach out to take on monetary assistance from other European countries that caused the subsequent rally.

Amidst the global financial crisis, gold performs excellently because it is seen as a hedge fund against inflation and weak paper currency. Even though last year saw gold reach an unprecedented $1,900 per ounce (compared to $300 per ounce in 2003), speculators who expect to see gold surpass this benchmark this year are not uncommon. Especially after a slow summer and the recent upward trend for the precious metal, talk abounds of gold soon hitting $1,800, then $2,000, then eventually $2,400.

Analysts at Merrill Lynch wrote in a report that they expect to see gold reach $2,400 by the end of 2014. They also don’t expect to see gold dip below $1,500. “Given the new open-ended nature of QE3, the upward pressure on gold prices should continue until employment is strong enough to require a change in policy. In our view, this is unlikely to happen until the end of 2014,” the report said.

This is the Federal Reserve’s third stimulus program since the 2008 financial crisis, and consists of the government buying around $40 million of mortgage-backed debt each month to reduce consumer debt and boost the economy. Especially in conjunction with “Operation Twist,” which consists of the Fed buying a lot of short-term loans in order to cut down on long-term debt, this is a much more aggressive series of policy than most anticipated, which translates into good tidings for gold.

To sum up this week, Monday prices fell largely due to profit-taking, according to most sources. Profit-taking pressure and continued through Tuesday. On Wednesday, gold jumped slightly off of news that Japan was going to be enacting some new stimulus measures, including 10 trillion yen, or the equivalent of $128 billion, to buying asset funds. The U.S. dollar index was also weaker on Wednesday. Keep in mind, this is in addition to the European Central Bank’s announcement earlier this month that they’d be buying troubled E.U. bonds. Then on Friday, speculation that Spain would be undergoing further borrowing prompted one last move upward for the week.