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.

Mar 11

Price of Gold Weekly Recap – March 4-8, 2013

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Monday Open: $1,574.60
Weekly High: $1,584.50
Weekly Low: $1,566.30
Friday Close: $1,578.10

Gold experienced some modest ups and downs this week, but nothing occurred to dramatically alter the price bracket, so the yellow metal ended the week nearly the same as it began.

Monday opened pretty flat, trading around a solid $1,575. Strong economic news from China and steady gold demand continued through to Tuesday, when fresh economic stimulus measures were announced to boost the economy up to a targeted 7.5% GDP. This is a bullish factor for the raw commodity sector, as well as stocks worldwide. However, the price gain was kept in check by the news that the Dow Jones Industrial Average hit a new all-time record high, which drew interest toward riskier endeavors and away from safe haven investments like gold.

Wednesday saw some gains after the Federal Reserve released news that their economic reports only show moderate to modest economic growth, not enough to put a halt to the aggressively low monetary rates that are currently in place. Gold bugs are delighted on this news because loose Fed policy helps keep gold relevant as a hedge fund.

Thursday held on pretty steadily, with some impetus in trading from a lower U.S. dollar and some positive economic developments in Europe. Mostly, though, traders were awaiting Friday’s employment reports for the month of February.

The sharp dip in prices on Friday was indeed due to Friday’s morning reports of better-than-expected jobs growth and declining unemployment rates. Friday hit a fresh two-week low, but quickly rebounded on short-term bargain hunting and opportunist market-seeking to close the week slightly higher than it began.

Mar 04

Price of Gold Weekly Recap – February 28-March 1, 2013

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Monday Open: $1,593.60
Weekly High: $1,615.80
Weekly Low: $1,567.40
Friday Close: $1,575.90

After last week’s abysmal returns for gold, this week started off faring a little better as short-term investors swooped up the advantages of the low price of gold over the weekend. Monday opened very near the $1,600 mark, rose a little above it early in the week, but ended lower again. There was also some global news that was positive for gold on Monday, including more gold purchases in Russia, a lowered debt status for the UK and a monetary easing program in Japan.

Tuesday was the best day for gold this year so far. The yellow metal enjoyed 2% gains after a speech by Federal Reserve Chairman Ben Bernanke, in which he further reinforced his support for the current quantitative easing programs. There had been talk in the past few weeks of rethinking the low interest rates and bond-buying programs, but his speech on Tuesday provided a much-needed sigh of relief for gold investors.

Right before gold spiked on Tuesday, Monday marked the day when Goldman Sachs predicted the end of gold’s 12 year winning streak. Mixed signals much? Predictions for gold are all over the place right now, as some gold bugs firmly believe gold is just experiencing a rough patch and will continue toward the $2,000 mark this year, while others are seeing a bleaker picture for the precious metal.

Another factor that had been contributing to gold’s rise early in the week was a gridlocked election in Italy that some suspected may cause financial unrest in the country. However, by Wednesday the situation had calmed down enough for those buyers to leave the gold market, causing a short drop in price. Profit-takers also dragged down the market as they collected wins from Tuesday.

Friday marked the first day of March, and reports came rolling in that showed gold in an unfavorable light. The last day of February marked the fifth straight month that gold has experienced monthly losses. Improved global economics are lessening strength in gold as a safe haven. The dollar was also stronger on Friday, pushing gold down even further.

Feb 25

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

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Monday Open: $1,614.10
Weekly High: $1,615.50
Weekly Low: $1,556.90
Friday Close: $1,580.50

Gold whisked by the $1,550 mark on Wednesday, dropping 2% for the week to hit a fresh eight and a half month low. This week did not bring good tidings for gold bugs, as the yellow metal proved an 11% decrease already this year. A few factors contributed to this decline, including the projected improvement of major world economies, and, most notably, concerns that the Fed will drop its monetary easing policy, which would have a disastrous effect on gold.

Monday started the week off slow, maintaining a pretty level $1,610. Tuesday continued at a fairly steady pace above the $1,600 mark, as the dollar index continued to stay low. The lack of investor activity during the beginning of the week was largely due to anticipation of Wednesday’s Federal Reserve meeting.

Wednesday, the big news of the week struck as the Federal Reserve gave indication that they may change or halt their quantitative easing policies that have been a major source of gold’s soaring in the past three years. Gold has been volatile in the past year, and especially the last few months, recently because of expected improvements in the U.S. and European economies. Gold is seen as a hedge fund against failing currencies, however, the dollar has been strong recently, the European Union is on its way out of its sovereign debt crisis, and stock markets have been rallying worldwide, lessening safe haven interest in gold as investors stoke a riskier appetite.

So, on Wednesday, the Federal Reserve’s Open Market Committee released news that because of improved economic conditions, they may rethink their massive asset-purchasing program that has been in place and that was renewed in December. Gold, accordingly, suffered a major drop to hit a fresh 50-day moving average that is below its 200-day moving average. This, according to popular price analysis lingo, is dubbed a “death cross” because it usually signals an acceleration of price declines.

However, a Dow Jones report on Wednesday also revealed that a historical analysis of gold shows an exception to the “death cross” rule for gold; gold prices tend to rebound in the weeks and months after the ominous-sounding death cross. Also, investors may have overreacted to the Fed’s minutes, since the meeting’s proposal was inconclusive, Bernanke is a clear supporter of quantitative easing and the conversation is set to continue in March.

Thursday saw some short term recovering and a slight rise in prices, but Friday closed the week on a seven-month low.

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.

Feb 04

Price of Gold Weekly Recap – January 28-February 1, 2013

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Monday Open: $1,654.50
Weekly High: $1,681.90
Weekly Low: $1,654.50
Friday Close: $1,667.90

It was a good week for gold after many U.S. economic reports and the Federal Reserve’s regular meeting concurred that the U.S. economy is not yet in a state of repair strong enough to push down gold. Following a bearish decline from last week, this week closed on a higher note than it opened.

Monday started off sluggish, a little flat on a relatively strong dollar. Most of Monday was spent in anticipation of news to come later in the week. Tuesday rallied a little bit as the dollar sunk slightly, and a Consumer Confidence report revealed worse than expected economic data – a 58.6 rating, well below the 64.0 expected mark.

Wednesday was the real day of growth for gold this week. The price of gold was bolstered by the Federal Reserve’s FOMC meeting, in which Chairman Ben Bernanke reiterated the low interest rates and bond-buying program that was set in motion at the end of last year. Concerns have arisen lately that the Fed might pull back on their quantitative easing should the economy show considerable improvement, but the U.S. GDP report released this week showed that the country’s economy had actually contracted 0.1% in the fourth quarter of 2012. Bernanke confirmed that interest rates would remain negligible until unemployment hits 6.5%.

Unfortunately for gold, the yellow metal gave back all its gains on Thursday, despite bullish factors in the marketplace like a weak dollar and poor economic data. Though no one single external factor can be pinpointed for this loss, the drop was probably due to profit-taking from short-term traders.

Friday saw a continued release of negative U.S. economic data, which gave a small spike to the price of gold. The U.S. jobless claims report missed their mark by 38,000, ticking the unemployment rate up to 7.9%. However, later in the day a stronger manufacturing report was released, undoing many of the slight gains that had occurred earlier in the day.

Next week, gold is predicted to stay in the $1,650 to $1,700 range, with the European Central Bank meeting on traders’ radar.