Aug 03

Price of Gold Weekly Recap – July 30-August 3

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Monday Open: $1,621.00
Weekly High: $1,625.40
Weekly Low: $1,586.30
Friday Close: $1,603.60

This week gold opened at a 6-week high, trailing off gains from last week’s European refinancing, and though the price of gold dipped lower as the week progressed, it still managed to close above the $1,600 mark. After last week’s 2.5% price jump due to news that the European Central Bank is prepared to give the economy a boost by printing more money (which will devalue the euro and send people to a safe haven in gold), Monday opened high but sank on Tuesday as many investors decided to opt out of gold and leave the market with the gains just made.

U.S. unemployment and job loss data was bleak early in the week, buffering gold losses, and the Fed gave an uneventful public address on Wednesday, which again confirmed no economic easing, though it did acknowledge economic sluggishness. Still, gold bulls are hopeful that the coming weeks will finally show some economic easing from the Federal Reserve.

By Thursday, gold had been on a 4-day downturn as both the U.S. and the Eurozone disappointed with a lack of concrete economic policy. Contrary to expectations, European Central Bank president Mario Draghi did not announce any monetary policy or interest rate changes. He addressed the public to say that any government bond buying wouldn’t occur until September, and only on certain conditions. Thursday dropped down to around $1,585 — $30 down from Monday.

“It appears that central banks now need more economic data for them to come out with more aggressive actions, and that’s disappointing for gold investors,” Phillip Streible said on the matter. He is the senior commodities broker at R.J. O’Brien, a futures brokerage.

Yet, gold rose a percentage point on Friday as the dollar buckled, more negative unemployment data rolled in, and investors once again began betting on Fed easing. This kept the yellow metal afloat above the $1,600 mark; although, the beginning of the week marked a 6-week high, the end of the week marked the biggest weekly drop in prices in the same time frame. Gold is still trapped in the $1,525 to $1,675 trading range, a long way from the year’s high of $1,781 in March, held captive mainly by the ambiguous remarks made on economic policy by Fed and ECB chairmen.

Jul 27

Price of Gold Weekly Recap – July 23-27

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Monday Open: $1,578.90
Weekly High: $1,626.70
Weekly Low: $,1569.10
Friday Close: $1,624.20

After weeks of a hesitant gold market driven by uncertainties surrounding the European debt crisis and continued lack of U.S. monetary easing, gold finally broke confidently above the $1,600 barrier this week when a series of reports started signaling a weaker euro ahead. Gold gained around $60 from the slow beginning of the week to a somewhat anticipatory closing, moving from the greatest inverse correlation to the dollar since January to the highest price of gold in more than a month.

Gold investors started out the week skeptical as the dollar reached a two-year high and gold stood at a -0.718 correlation with the paper currency, the strongest since the beginning of the year. Since gold trades inversely to the dollar, the yellow metal weakened as the greenback gained strength.

Worries over the Eurozone debt crisis continued to plague gold at the beginning of the week, but took a few surprising turns as the days rolled on. Tuesday started a very slight uptrend when Greece announced the country probably would not be able to pay its debts, indicating to investors there could be room for economic restructuring.

Then, Spain and France announced on Wednesday that the Eurozone would be adopting a common strategy to stabilize the euro, including enacting a supervisory mechanism on all euro area banks. This could mean that the European Central Bank could get significant and cheap funding, which could subsequently devalue the euro, thus elevating gold in a similar inverse fashion as the gold-dollar relationship. Sure enough, Wednesday saw gold reaching a two and a half week high after this news broke.

But it doesn’t end there.

Thursday continued the path of European restructuring and gold was bumped even higher after ECB president Mario Draghi proclaimed that he was ready and willing to take any steps necessary to float the euro. Specifically, “The ECB is ready to do whatever it takes to preserve the euro,” he said. Speculators can decode that as meaning that the bank will be inclined to print more paper money, which would inevitably reduce the strength of the currency and encourage investors to flock back to gold as an established safe haven.

Peter Schiff of EuroPacific Capital is one industry spokesperson who sees this as a major breakthrough for gold. The metal has been stuck in a limbo for a while, and Asian and Indian investors are still generally sitting on the sidelines as their economies stumble through some bumps this year. But while investors have been waiting anxiously for a signal from Federal Reserve chairman Ben Bernake that the U.S. would start printing more money, instead they got that confirmation from the European Central Bank regarding the euro, and it’s no small potatoes.

Schiff said on Thursday, “I’m surprised that gold is not rallying even more considering what’s happening.  Gold has now broken out of a channel.  There was a very nice trendline and we just broke out of that today.  Now that we have broken out of that channel, there is a lot of room to the upside.”

It should be an interesting time ahead for gold.

Jul 20

Price of Gold Weekly Recap – July 16-20

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Monday Open: $1,588.10
Weekly High: $1,596.50
Weekly Low: $1,569.30
Friday Close: $1,584.00

This week continued the typical holding pattern that gold has been experiencing since the beginning of the summer, following a few modest ups and downs but generally maintaining a steady balance, not straying not too far from $1,580 during this 5-day trading period. The major events of the week included anticipation of some change in Federal Reserve Chairman Ben Bernake’s economic policy, gains in the Indian rupee, a falling dollar and escalating conflicts in the Middle East.

Monday opened steady, with a weak dollar index, firm oil prices and news from China that their economy is still sluggish. Monday evening and Tuesday morning marked a slight rise in the price of gold to almost $1,600 (with some opting out of the market, as well), as bullish traders anticipated Bernake’s remarks on Tuesday afternoon. Despite the same story repeating itself over the past few months, where some clues indicate that Bernake may loosen U.S. economic restraints, thus burgeoning gold, he once again disappointed gold bulls on Tuesday with no concrete changes in financial policy. Compounding the disappointment was a slightly stronger dollar, and prices dropped to close lower on Tuesday.

Bernake spoke again on Wednesay, and true to pattern, said nothing on third quarter easing. Gold dropped slightly. Thursday revealed more weak U.S. economic data, spurring gold to climb back to its original state of around $1,580, and this foundation persisted through the end of the trading week. Friday saw slightly higher economic reports and a stronger dollar, but not enough to create a significant change in price.

Indian demand for gold is on the radar this week, as the rupee has been gaining strength and Indian traders, especially jewelers, are anticipating next month’s festival and wedding season. Gold is a tremendous part of Indian culture, especially special events and weddings, and though the rupee saw modest gains this week, Indian traders are still generally hanging out on the sidelines. Still, some analysts predict the price of gold to spike as much as 25% in the next month due to Indian demand.

In other news, a suicide bomber attacked a bus full of Israeli tourists in Bulgaria on Thursday, and late Wednesday, the Syrian defense minister was assassinated, heightening tensions in the Middle East. Any serious conflicts arising in the Middle East will likely spur a safety rush into gold, as well as increases in crude oil, which would also strengthen the precious metal.

With all these competing and mostly hypothetical factors influencing gold, the yellow metal seems to be stuck in a summer limbo. One report quoted Goldman Sachs as expecting gold to reach $1,840.00 per ounce in the next six months. As for now, traders are still waiting for U.S. policy changes, and Kitco’s weekly survey reported that participants are still pretty evenly split on the future of gold.

Jul 14

Price of Gold Weekly Recap – July 9-13

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Monday Open: $1,581.20
Weekly High: $1,600.10
Weekly Low: $1,556.30
Friday Close: $1,589.40

Gold took a minor upswing followed by an equal downturn this week, followed by another upswing to regain balance, opening around $1,580 to close at just about the same price. This week continued the major pattern of gold this year, with modest (under $50) fluctuations, though no major changes. Many experts believe that gold will hover around the $1,500 mark amidst all the economic changes happening in the U.S. and Europe, and if it does so, it remains a fairly stable investment. Reaching the $1,600 mark is always a slight cause for celebration, and it just touched it again this week.

Gold continues to rise inversely to the dollar, and Monday opened with a strong dollar, pushing gold down. Tuesday marked a volatile day, as morning news reported dollar losses, pushing gold up to exactly $1,600, then dropping back down $40 as updated information became available and the euro actually spiked tremendously. This proved to be the strongest inverse correlation between gold and the dollar in almost two months, since the dollar reached nearly a two-year high.

Still, gold is hovering in the safe range, which falls between $1,550 and $1,630.

Afshin Nabavi, head of MKS Finance, commented on this recent price range for gold. He said on Tuesday, “It looks like $1,630 is pretty much a brick wall, while on the downside, $1,550 is equally strong support. So unless something extraordinary happens, we will be stuck in this range…Everyone wants to get involved in gold, but they have been disappointed several times, so I think we need a confirmation that gold is really going somewhere, and that will only happen when it gets above $1,630, only then will we have some investment come back into the market.”

As for now, gold is trading in a fairly safe, yet limbo, state.

Wednesday and Thursday saw similar hesitations against the dollar, as investors await the Fed’s next move. Recently, the dollar has been performing well and the Fed hasn’t eased up on economic restrictions, keeping gold investors on their toes. More support has lately been headed in the greenback’s direction. China and Hong Kong have experienced some recent slowing of their economy, and investors waited expectantly all week to hear news of China’s refinancing policies.

So, as much as the price of gold dropped inversely to the dollar at the beginning of the week, it gained an equal amount in response to Friday’s news that China’s economic growth has fallen short of expectations. This report came a day after the Fed’s minutes reported no change in policy on Thursday, and gold saw a modest spike as investors took hope in the yellow metal’s recovery against a flailing yen. China reported a sixth consecutive quarter of losses, so Friday ended with a net weekly gain of about $6, as many believe the economic reports might spur the Chinese government into easing monetary rates.

Jun 30

Price of Gold Weekly Gold Recap – June 25-29

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Monday Open: $1,584.00
Weekly High: $1,602.90
Weekly Low: $1,550.80
Friday Close: $1,599.10

Gold prices this week flew up and down amidst significant Eurozone trading talks and U.S. rule change proposals. Gold opened around a steady $1,580 on Monday, dropped to a four-week low on Thursday and began trending back up by Friday.

This entire year has been characterized by volatile gold prices, a significant change from the past decade, which featured a fairly constant upswing, and this week was no different. Monday started in a wait-and-see kind of mode as investors anticipated the week’s events. This mode continued through the beginning of the week as gold stayed in a relatively steady limbo through Wednesday. The European Summit meeting was scheduled to begin on Thursday, so gold became a safe haven investment for some, as some others pulled out of the market.

Last year, gold reached its apex of $1,920 when the European debt crisis hit its full swing, but this year other factors are coming into play to temper a full-fledged uprising of the metal. Wednesday saw positive economic reports in the U.S., followed by two more positive reports on Thursday, and the EU summit began with very low hopes on Thursday. All this led to a fresh four-week low for gold on Thursday.

Yet, after continued talks about economic policy in the Euro Zone, some surprising things came out of the EU Summit that led to a slight rally for gold. These talks included proposals for centralizing banks, easing restrictions on emergency loans, and establishing one single banking supervisor for the EU Bank. Poor economic data and a weak U.S. dollar compounded this news to add to the fresh high of slightly above $1,600.

In other news, Obama’s health care act did not impact gold. There was also an FDIC rule proposal on Wednesday that may have significant implications for gold moving forward. The FDIC is an independent facet of the U.S. government that guards against risky bank dealings, and they ruled that gold would be considered a zero risk asset. Once this proposal is passed into law, it could lead to a significant bull market for gold up ahead.

Jun 16

Price of Gold Weekly Recap – June 11-15

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Monday Open: $1,594.70
Weekly High: $1,631.70
Weekly low: $,1585.80
Friday Close: $1,626.70

Gold has been on a steady upturn this week, trading fairly consistently above the $1,600 level. The metal has rebounded dramatically since last week’s pull away from the market when Federal Reserve Chairman Ben Bernanke gave no sign as to U.S. economic easing. This week, gold investors became more concerned with the European debt crisis, and the price of gold rallied when it became clear that Spain, Italy and Greece are all facing even more severe economic worries.

Monday started trading significantly higher than last week’s close after a rescue loan of $125 billion to Spain fell short of expectations to ease the country’s long-term economic instability. Italy also experienced greater debt, and Greece’s economy is in limbo as voters take to the polls on Sunday.

Wednesday saw modest gains, partly due to the release of more weak U.S. economic data. The entire week has seen asteady growth in gold, especially compared to the volatility of the past few weeks. Friday closed solidly above the $1,600 line.

However, while prices continued to rise throughout the end of the week, the price of gold still hangs delicately in between a safety net and risk asset. Upcoming events in Greece and the Federal Reserve will play a role in gold’s future. The Greek elections are this Sunday, and if voters ring in politicians who are against the bailout loans, as many expect, it could mean Greece moves away from the euro, further weakening the stability of the region’s currency. This could mean strength for gold as a security measure.

In fact, Kitco’s weekly poll showed that most people expect gold to rally after this weekend. In a sample of 23 participants, 18 anticipate a rise in gold. However, some skeptics aren’t sure of the outcome of the Greek elections, or whether it will signify a move to gold; some think it will actually strengthen the dollar.

In U.S. economic news, the Federal Reserve is scheduled to update the public on the state of economic policy this coming Tuesday and Wednesday, June 19th and 20th. As usual, investors are hopeful that Bernanke will announce some sort of loosened economic policy that involves printing more paper money, thus weakening the dollar and boosting gold.

Jun 09

Price of Gold Weekly Recap – June 4-8

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Monday Open: $1,619.10
Weekly High: $1,639.70
Weekly Low: $1,566.50
Friday Close: $1,593.90

Last week closed with gold spiking to a surprising high, surging 4.3% after weak U.S. economic data rolled in, including low employment rates and non-farm payroll reports. Last Friday, gold saw the biggest one-day increase in three years, prompting some investors to cash in those gains. The price of gold has been volatile the entire year so far, so when those investors fled the market, Monday opened with a slight pause as many wondered whether U.S. economic policy might ease in response to the negative economic news.

The price throughout the week remained fairly steady up until Thursday. India is the world’s largest importer of gold, and as Friday saw the rupee fall to an all-time low in relation to the dollar, Indian gold investors started selling when the price was high.

Yet, as the economic crisis in Europe continued to worry investors and weak U.S. data started filtering in, there was an equal balance of “safe haven” investing in gold. The pause occurred partly because much speculation abounded about whether the Federal Reserve would finally ease monetary policy. Continue reading →

May 21

Price of Gold Weekly Recap – May 14-18

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Monday Open: $1,556.83
Weekly High: $,1597.57
Weekly Low: $1,529.50
Friday Close: $1,591.98

Price of Gold May 14th to 18th 2012

The price of gold took two tumultuous turns last week, opening at a relatively stable $1,550 per ounce, dropping to a drastically weak low on Wednesday, and then rebounding dramatically to return to this year’s base average around $1,600 per ounce.

Gold has been dropping up and down this year as the dollar and euro bounce back and forth, and this past Wednesday marked a major turning point in the euro. Greece’s efforts to form a new government fell short of expectations, causing the euro to drop and the dollar to rise. Investors who have been counting on a higher gold price lost their appetite for risk after Wednesday’s financial troubles, and there was a massive pull out of the market. Gold dropped to its lowest point since December, largely fueled by a fear that Greece would pull out the euro zone and thus worsen Europe’s debt crisis.

“Everybody is rushing to buy the U.S. dollar. A strong dollar is negative for gold for the time being,” said Ronald Leung on Wednesday. He is the director of Lee Cheong Gold Dealers in Hong Kong. Continue reading →

May 14

Price of Gold Weekly Recap – May 7-11, 2012

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Monday Open: $1,637.47
Weekly High: $1,638.27
Weekly Low: $1,572.04
Friday Close: $1,578.35

Gold has been down this week, culminating in a rare three-month long downward trend that reached its first bottom on Tuesday, and then dropped to gold’s lowest point since March on Friday. February 28th was the last high point for gold, reaching $1,795 an ounce.

To put in perspective how rare a three-month downward spiral is, since 1957 there have only been 65 occurrences in 661 three-month periods, or only 9.8% of that time period.

A few key factors played into this week’s nosedive, notably a stronger U.S. dollar, rising crude oil prices and continuing uncertainty about Europe’s debt crisis spurred by this past weekend’s political elections. Continue reading →

Apr 30

Price of Gold Weekly Recap – April 23-27, 2012

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Monday, April 20 Open: $1,636.81
Low: $1,623.54
High: $1,667.30
Friday, April 27 Close: $1,664
Weekly Change: + 1.3%

This week saw gold prices begin with 2-week low and then end with a 2-month high. Monday held the week’s low in the afternoon, as the U.S. dollar stayed firm and crude oil weakened, then the exact opposite happened on Thursday, as the dollar started dropping and crude oil steadied, contributing to the rise in gold market values.

Tuesday, April 24th saw a slight spike in gold prices as India celebrated its largest gold-buying festival, Akshaya Tritivai. Though gold is traditionally bought in physical jewelry form, some of the younger, urban Indians are Internet savvy and prefer to buy gold in the form of exchange-traded funds (ETFs).

“Gold has become an asset class which is a must-have in many people’s portfolio,” said Gnananskhar Thiagarajan, the director at Commtrendz Research. Continue reading →