Tag Archives: eurozone

May 06

Price of Gold Weekly Recap – April 29-May 3, 2013

Posted on by

Monday Open: $1,468.10
Weekly High: $1,482.30
Weekly Low: $1,440.90
Friday Close: $1,469.40

Gold rebounded somewhat to the nearly $1,500 level this week as economic matters returned to center stage and fresh interest in gold returned. Monday opened with a 1% gain since Friday on a falling dollar. Tuesday was up and down but ended higher on bargain hunting and the declining dollar. U.S. economic reports issued on Tuesday were a mixed bag, but not conclusively positive, spurring more interest back to precious metals.

The big news of the week was the Federal Reserve meeting on Wednesday. Gold dropped sharply in anticipation, but bounced back up after the FOMC announced that they were going to maintain both zero percent interest rates and the $85 billion per month bond buying program until the economy picks up. There are no indications from economic data that unemployment will drop anytime soon, and many March reports were weaker than expected. The Fed also made no mention, as previously alluded to, of a near end in sight for their economic policies. These are all bullish factors for gold.

Thursday showed steady gains as traders picked back into the market, and the European Central Bank lowered its interest rates from 0.5% to 0.25%. The Euro zone is also experiencing slow economic growth. Friday’s gold prices slipped down back to near the week’s opening price on better-than-expected U.S. jobs reports. Unemployment dropped to 7.5% in April, the lowest in four years.

Mar 25

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

Posted on by

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

Posted on by

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.