Jan 28

Price of Gold Weekly Recap – January 21-25, 2013

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Monday Open: $1,690.00
Weekly High: $1,695.40
Weekly Low: $1,657.40
Friday Close: $1,659.20

Though lacking significant external selling pressures this week, gold nonetheless took a $30 loss to break the upward trend that was characteristic of the beginning of the year. The price drop can be generally attributed to global economic improvements that are projected to continue throughout 2013, lessening interest in gold as a safe haven.

Monday opened slow and steady as trading was quiet for the Martin Luther King, Jr. holiday. Tuesday was also fairly steady, despite bullish news for gold from Japan. The Bank of Japan announced a quantitative easing program that would raise its inflation aim from 1% to 2%. Amidst this news, the U.S. dollar fell against the yen by 1.2%, but this didn’t make much impact on gold.

Wednesday’s global economic reports caused a drop in gold. The European Union reported positive growth for January, and a Reuters poll projects overall world economic growth based on a recovering Asian economy. With major industrialized countries showing economic recovery, gold hasn’t necessarily lost its sheen, but it may be downplayed as a safe haven investment in the coming weeks. Citibank downgraded its projection for gold on Monday by 4.2% to $1,653 per ounce for 2014.

Thursday dropped gold back to a mid-December trading range, 13% below the highest the yellow metal ever reached in 2011 – $1,923 per ounce. Thursday’s decline may just be a continuation of the previous days positive global economic growth reports. Friday continued to descend to end the week with a two-week low.

However, all expectations for gold are not lost; they seem to just be paused.  While most analysts expect to see slow movement for gold in the next few weeks, ScotiaMocatta, a global trading company, highlights the big picture by saying in a report, “The financial system is drowning in debt and there seems no end in sight to ongoing massive budget deficits.  Confidence in the financial system and in the fiat government paper that facilitates it will remain low.” Next week, the FOMC will meet again, but no monetary policy change is expected.

Jan 21

Price of Gold Weekly Recap – January 14-18, 2013

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Monday Open: $1,667.80
Weekly High: $1,694.10
Weekly Low: $1,667.80
Friday Close: $1,684.30

It was a good week for gold. After continued hums in the marketplace questioning gold’s volatility, January is proving to be a bull month for this yellow metal. Gold gained 1.6% this week, its highest move since November 2012. This follows last week’s 0.3% gain, which ended a six-week long losing spree. Speculation still abounds about gold’s true winning capacity, but so far, the market is showing slow but steady gains.

Monday opened with the low of the week and shot steadily upwards through Tuesday. On Tuesday morning, news broke that platinum was trading higher than gold, a rare phenomenon that last occurred March 2012. Platinum hit $1,702 while gold stayed around $1,682. Platinum rose largely due to the halting of some major mines, increasing desire for the metal. Gold responded little on Tuesday, but as platinum hit its seventh bullish day on Wednesday, gold did take a little drop.

Thursday’s drastic price fall can be attributed to the U.S. weekly jobless claims report, which was significantly better than expected. However, gold quickly rebounded a little while later in the day after U.S. manufacturing data revealed unexpected contraction.

Though the fiscal cliff crisis has passed, Credit Suisse analyst Tom Kendall pinpoints the U.S. debt ceiling as a major factor for gold. He assesses the situation as being positive for gold, since the U.S. faces downgrades from credit agencies, and thus a stronger investment in hedge funds. It will also get people thinking about the long-term value of the dollar, which will most likely turn out to be bullish for gold. The debt ceiling debate is on the horizon for the end of February.

Friday consolidated the week’s gains to end on a high note. Amid the trading activity this week, a few major investment companies added further speculative projections for gold in 2013. The projections vary drastically, as Goldman Sachs downgraded its 2013 gold prediction to $1,200, while successful gold producer Iamgold upgraded its projections to $2,500. Falling smack dab in the middle, metals consultancy firm GFMS predicted a bullish year for gold, anticipating $1,900 in the first two quarters. This firm cites strong demand from central governments and increased buying from India and China as factors for growth.

Despite hesitation in the market, the overall sentiment still maintains a positive light. Analysts at UBS, a Canadian financial firm, summed up Friday’s gains by stating, “The physical market is off to a good start this year, with many indicators so far pointing to a positive demand story.”

Jan 11

Price of Gold Weekly Recap – January 7-11, 2013

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Monday Open: $1,658.90
Weekly High: $1,678.90
Weekly Low: $1,646.10
Friday Close: $1,660.30

Gold’s begun the year on a volatile sprint toward an uncertain future. Just barely adding one more notch on a twelve year upward trend at the end of 2012, the precious metal spent this week gaining and losing momentum by turns. After the Federal Reserve’s hints at lessening quantitative easing last week, the market has been shifty, though no real news has broken. The change in the price of gold from the week’s beginning to end is negligible, hovering around $1,660.

Monday opened the markets to hit the week’s low after traders were still processing the Fed’s minute’s from last week. The $1,645 level gold hit is the lowest since mid-August 2012, and it continues a six-week downturn. However, regarding the Fed’s foreshadowing, it’s not overly likely that the Fed will change its policy anytime soon. Some of the weightiest names in the Fed – ChairmanBen Bernanke, Vice Chair Janet Yellen and New York Fed President William Dudley – aim to retain the status quo. Furthermore, some of the world’s most prominent investment strategists, including PIMCO’s Bill Gross and DoubleLine Capital’s Jeffrey Gundlach, do not expect to see the Fed changing tactics in the near future.

Tuesday rebounded a little bit to eke its way over the $1,650 mark. Wednesday swayed up and down around that range, ending a little higher on a dipping dollar. There weren’t too many external circumstances to affect the price of gold this week, though traders are waiting to see what U.S. lawmakers will do next, and hinging on fresh economic data from China ahead of the Chinese New Year. Usually, the Chinese New Year is a great time for gold, but this year’s gains are uncertain.

Thursday saw a gold rally after the European Central Bank meeting, in which it was decided that low interest rates would remain unchanged. The Bank President related to his constituents a positive outlook for economic growth. The Bank of England will not expand its quantitative easing program.

From the nearly $1,680 high of Thursday, gold plummeted back down to Monday’s levels on Friday, largely due to fresh economic data from China. The Chinese consumer-price-index flew up 2.5%, ahead of economists’ expectations, indicating higher inflation. The fear for gold is that the Chinese government may enact cautionary measures against inflation, tightening economic policies.

The jury is still undecided on the future for gold, but only time will tell whether 2013 will prove to be the end of gold’s bullish journey or whether the yellow metal has just been getting over a slump toward even greater heights.

Jan 04

Price of Gold Weekly Recap – December 31, 2012-January 4, 2013

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Monday Open: $1,675.20
Weekly High: $1,689.50
Weekly Low: $1,628.00
Friday Close: $1,651.70

Gold ended 2012 with a 12 year hot streak. The past decade has treated gold very well, and this yellow metal has been the talk of the town amid a global recession. Seen by investors as a safe haven, gobbled up by governments as alternative currency and watched by many as an indicator of economic turmoil, gold has had a large role in global finances in the past ten years. Although gold closed this year nearly $300 below the all-time high of $1,900 from 2011, the price of gold is still at a remarkable high, and boasts a 6% increase from the price at the end of 2011.

The markets were silent Monday and Tuesday for the New Year holiday, but reopened with a bang on Wednesday. Starting the year off right, gold responded well to the announcement on Monday that U.S. policymakers had reached an agreement regarding the fiscal cliff. Wednesday saw this week’s high of around $1,690. The fiscal cliff agreement, which had worried investors and citizens alike, rallied a global spike in trading around the globe.

Thursday, however, gold started to dip after better-than-expected unemployment data for the U.S. was released. A firmer dollar also slipped gold down a little, as these factors lessen the strength of gold as a safe haven investment.

Friday also saw losses in the gold market as investors worriedly responded to the previous day’s Federal Reserve meeting, in which members expressed mixed ideas about keeping the loose monetary policy that had been in place all of 2012. After the prolonged fiscal cliff agreement (a decision wasn’t reached until after December 31st, the cutoff date) Federal Reserve members discussed shortening the length of time for the previously decided mortgage-backed securities and long-term Treasury bonds. Some believe the policies should last until the end of 2013, some think they should end before the year, and some think there even needs to be further measures implemented.

These loose monetary agreements keep interest rates low, which at once help the economy bolster back but also create conditions rife for inflation, a positive sign for the hedge fund gold. With stricter Fed policies, gold may not be seen as such a secure hedge fund. Friday saw prices drop to the lowest since August. Gold investors will be keeping a very close eye on the Fed’s moves.

Dec 29

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

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Monday Open: $1,660.40
Weekly High: $1,665.60
Weekly Low: $1,650.90
Friday Close: $1,656.30

The holiday week made for slow trading, and the gold price didn’t fluctuate very much from Monday to Friday – an uncommon phenomenon lately as gold prices have been extremely volatile. All the factors that make gold volatile are still at work, specifically the fiscal cliff, but somehow, the holidays just always seem to make people less jittery than usual. The fiscal cliff deadline has been moved to January 3rd, so we can expect to see more market movement next week. All markets have suffered volatility due to the economic indecision of U.S. leaders. Last week, gold prices fell drastically and now they’re hovering in the mid-$1,600s, about $100 less than the stability of the $1,750 range just a few weeks ago.

Monday, Christmas Eve, the gold market slumped only a little – traders were most likely away from their desks, spending time with family. Tuesday, Christmas Day, the markets were closed as traders enjoyed time off for the holiday.

Wednesday, as the market reopened and people started returning to the world of work, the price of gold took a little upward turn on a low dollar, but trading volume was still fairly thin as it’s natural to want to stretch a holiday as far as possible.

Thursday’s trading was still thin, and the low volume of trading continued through to the end of the week. Thursday and Friday both reacted slightly to continued news of the fiscal cliff, but until more steady news becomes available, the market is fairly numb to the looming decision. The House of Representatives will meet one more time on Sunday night to try and reach an agreement with President Obama. Some pundits expect the January 3rd deadline to be missed, but for politicians to reach some sort of agreement mid-January.

All in all, the price of gold only slipped a net total of $4 this week on thin holiday trading. It seems to have turned into a bear market for gold, and despite recommendations from organizations like Citigroup and Morgan Stanley to pull out of gold, over 80% of gold executives see the price of gold rising in 2013, according to the PwC Gold Price Report. Other notable analysts expect gold to shoot above $2,200.

Dec 14

Price of Gold Weekly Recap – December 10-14, 2012

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Monday Open: $1,711.90
Weekly High: $1,722.00
Weekly Low: $1,692.90
Friday Close: $1,696.30

The big news in gold trading this week was the two-day FOMC conference, economic reports for major world economies, and an automatic trading sell-off in Asian trading. The FOMC conference spiked prices on Wednesday, then sell-off sprees dropped the price for almost no reason on Thursday. Speculation abounds about whether gold has reached its limit as we head into 2013.

Monday was relatively quiet, and not much trading occurred after President Obama and House Speaker Boehner met face to face on Sunday to discuss the fiscal cliff crisis. Traders in all sectors are worried what will or won’t happen before the end of the year, and the fiscal cliff still tends to bring all commodities sectors down, but nothing new brought any light to the situation. The OECD released a report that projected that economies of the U.S., the U.K and China will grow over 2013, but that those of the European Union, Japan and Canada are expected to contract. If world economies are bouncing back, this could be a bearish factor for gold.

Yet, gold responded positively to the news from Tuesday and Wednesday’s FOMC meetings that the Federal Reserve plans to keep interest rates low for approximately the next three years, or until unemployment reaches 6.5%.  The meeting discussed the end of “Operation Twist,” and the beginning of a new bond-buying program, which will entail buying $45 billion of Treasury bonds. The price of gold rose almost $9 on Wednesday.

Yet, Thursday saw some unexpected drops from that high, as Asian trading enacted some automatic sell-stops, which forces selling once a price reaches a certain point. This same trend happened a few weeks ago, for no logical reason, adding an unpredictable factor to gold trading.

The European Union, meanwhile, reached an agreement to appoint a single bank supervisor and EU banking union, which will be a positive sign for their economic recovery. Friday stayed at the low end of the sell-off range to close the week slightly below $1,700.

Gold is undoubtedly a volatile investment at this point in time, and some predict bearish futures for gold, citing that the precious metal is nearing the end of its decade-long streak, but others retain that with the world’s biggest economies still in flux and in the midst of inflation, gold is still a safe hedge fund. Goldman Sachs predicted the end of the gold, while Morgan Stanley credited gold as the “best commodity for 2013.”

Dec 07

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

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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

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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

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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

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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.