Tag Archives: syria

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.

Sep 09

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

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Monday Open: $1,389.90
Weekly High: $1,415.20
Weekly Low: $1,366.90
Friday Close: $1,389.20

Tensions in Syria continued to influence gold this week, and other global economic news also registered on gold’s radar.

Monday was a quiet day as U.S. traders stepped away from their computers for the Labor Day holiday. Overall, the yellow metal was little changed on the first day of the week.

Tuesday began the upward swing of the week, with traders returning to their desks to sweep up some of the lower gold prices for short-term trading. The continued question of a military strike on Syria was slightly revved up on Tuesday, as it seemed Congress might support President Obama’s plan to attack Syria for using chemical weapons. Traders returned to the gold market Tuesday on some increased safe haven buying.

Tensions eased slightly on Wednesday, causing some pullback from the stress trading. Prices also dipped on profit taking from the previous day’s wins. The U.S. Federal Reserve released an economic report Wednesday afternoon that showed the U.S. economy officially growing mildly to moderately, depending on sector. This news was not surprising, so it did little to affect market conditions.

Thursday morning was quiet on the gold trading front as traders anticipated a slew of U.S. economic data to be released in the afternoon. Sure enough, this data was positive and so caused a slump in the gold market. The reports included the weekly jobless claims report, the ADP national employment report, chain store sales trends, and more.

Even so, it was the U.S. jobs report Friday morning that people were anticipating, since many believe a positive report can influence the Fed to start their tapering program earlier rather than later. It was good news for gold bugs, however, with the unemployment rate falling one point to 7.3%, which was still behind expectations. The decrease was also not because people were getting new jobs but because people were leaving the work force, according to analysts. The non-farm payroll report was also lower than expected. Therefore, Friday afternoon saw prices rise to end the week near to where it began.

The Syrian conflict and the Federal Reserve’s decision about when to start the tapering program will likely influence gold prices next week.

Sep 02

Price of Gold Weekly Recap – August 26-30, 2013

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Monday Open: $1,393.90
Weekly High: $1,424.50
Weekly Low: $1,393.20
Friday Close: $1,394.50

This week’s gold price chart looks like a bell curve because mid-week spiked high in response to the Syrian crisis, then fell to close the week nearly as it started. Monday afternoon started the upward trend as gold broke the $1,400 price mark on safe haven trading related to the crisis in Syria. Secretary of State John Kerry released a statement that the U.S. believes Syria used chemical weapons against its citizens, a global war crime that President Obama said may be punished with a missile attack. George Gero, analyst at RBC, called the steady rising of gold prices in relation to the crisis, a “small fear premium.”

Tuesday continued the Syrian response trend to land gold a fresh three-month high, as the U.S. seemed poised to take military action in an already unstable Middle East.

Wednesday saw gold hit the week’s high, and also an all-time high against the Indian rupee. A faltering rupee could be bullish for gold, because even though gold is now more expensive to buy for those using the rupee, it reinforces the psychology behind why gold is important to have for the gold-savvy Indian consumers. Wednesday was a 3.5 month high for gold.

Thursday saw gold slipping back down from its mid-week high on profit-taking and a less nervous approach to Syria, after President Obama released a statement overnight that the U.S. does not plan on attacking Syria. U.S. allies are also not in agreement about what to do with Syria.

Friday’s extension of Thursday’s news continued to quell the anxiety over Syria, and so the marketplace responded by trading out of safe haven assets like gold, bringing the yellow metal back down to the week’s opening price range. The U.S. Labor Day weekend should mean that trading is slow throughout the beginning of the next week.

Jun 17

Price of Gold Weekly Recap – June 10-14, 2013

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Monday Open: $1,385.10
Weekly High: $1,394.50
Weekly Low: $1,368.10
Friday Close: $1,390.60

The price of gold was characterized this week by fluctuating economic news from various world markets. A few key moves were bullish for gold, while others reinforced the bearish streak to end the week without much drastic movement.

Monday began on bullish anticipation that China’s decision to buy two gold-backed exchange-traded products (ETFs) would push up demand for the yellow metal. China was the second largest consumer of gold in 2012 worldwide, so analysts expect this is a good thing for long-term gold prospects, however, we should not expect a huge rally in the near future. China’s ETF buy, rather, provides some stability for the continuation of gold demand.

Also, Standard & Poors upgraded the U.S. credit ranking to stable from previously negative on Monday morning, which boosted the dollar short-term, but did not have a wide effect on gold. China released some raw economic data that was weaker than expected, a subtle bearish factor for the raw commodities.

The Bank of Japan was the big catalyst for Tuesday’s loss, spurring some trading out of the market overnight. The bank decided not to expand its current quantitative easing program, as some had hoped, which pulled gold prices down. However, Bank Governor Haruhiko Kuroda said they might consider it again if their borrowing costs go up.

Wednesday morning was trading in the same ballpark as Tuesday, but saw some gains by the evening. It was a quieter trading day Wednesday, with the “risk-off” mentality making way for some technical short covering later in the day, as a weaker dollar incurred some buying back into gold.

Thursday was a day of speculation, as Japanese stock markets showed some losses and analysts worried whether this would spill over into U.S. trading. Even though gold generally acts as a safe haven during these situations, this week it was carried more heavily by a risk aversion mentality. Currently, economic turmoil is not tense enough to prompt a large shift back into gold.

Friday urged gold a little north as President Obama issued a statement that the U.S. will provide arms to Syrian rebels. This news encouraged traders to think about the possibility of escalation in an already war torn country, which did move some back into the safe haven of gold, ending the week slightly higher than it began.

The marketplace will be anticipating an address from the FOMC next Wednesday.