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.