Tag Archives: Federal Reserve

Sep 09

Price of Gold Weekly Recap – September 2-6, 2013

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Monday Open: $1,389.90
Weekly High: $1,415.20
Weekly Low: $1,366.90
Friday Close: $1,389.20

Tensions in Syria continued to influence gold this week, and other global economic news also registered on gold’s radar.

Monday was a quiet day as U.S. traders stepped away from their computers for the Labor Day holiday. Overall, the yellow metal was little changed on the first day of the week.

Tuesday began the upward swing of the week, with traders returning to their desks to sweep up some of the lower gold prices for short-term trading. The continued question of a military strike on Syria was slightly revved up on Tuesday, as it seemed Congress might support President Obama’s plan to attack Syria for using chemical weapons. Traders returned to the gold market Tuesday on some increased safe haven buying.

Tensions eased slightly on Wednesday, causing some pullback from the stress trading. Prices also dipped on profit taking from the previous day’s wins. The U.S. Federal Reserve released an economic report Wednesday afternoon that showed the U.S. economy officially growing mildly to moderately, depending on sector. This news was not surprising, so it did little to affect market conditions.

Thursday morning was quiet on the gold trading front as traders anticipated a slew of U.S. economic data to be released in the afternoon. Sure enough, this data was positive and so caused a slump in the gold market. The reports included the weekly jobless claims report, the ADP national employment report, chain store sales trends, and more.

Even so, it was the U.S. jobs report Friday morning that people were anticipating, since many believe a positive report can influence the Fed to start their tapering program earlier rather than later. It was good news for gold bugs, however, with the unemployment rate falling one point to 7.3%, which was still behind expectations. The decrease was also not because people were getting new jobs but because people were leaving the work force, according to analysts. The non-farm payroll report was also lower than expected. Therefore, Friday afternoon saw prices rise to end the week near to where it began.

The Syrian conflict and the Federal Reserve’s decision about when to start the tapering program will likely influence gold prices next week.

Aug 26

Price of Gold Weekly Recap – August 19-23, 2013

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Monday Open: $1,365.60
Weekly High: $1,399.70
Weekly Low: $1,356.90
Friday Close: $1,396.50

This week proved fruitful for gold, as a few economic global events pushed the price range up slightly higher by Friday, despite selling off early in the week. Last week showed improvements for gold, jumping 13%, so after those dramatic gains in an otherwise uncertain trading realm, traders were eager to reap the rewards from the incline and sell off their shares on Monday, bringing the price of gold back down to $1,365.

Tuesday saw gold rise a little bit on some more safe haven demand and a lower dollar. Traders are keeping an eye on the situation in Egypt, as this global crisis could push people back into desiring the hedge fund of gold. Other items of interest this week were the FOMC minutes released on Wednesday and Chinese manufacturing data released on Thursday.

Wednesday’s prices remained near steady as the FOMC released minutes that proved no real surprise to gold traders. With the expectation that the Federal Reserve would be soon employing their “tapering” program to end low interest rates, gold traders are cautious, but the meeting on Wednesday revealed no concrete time frame for when this would happen.

Because of the lack of news from the FOMC, Thursday’s prices remained steady with slight gains. The increase was also influenced by the manufacturing reports released on China’s economy, which had shown improvement. China is the world’s second largest buyer of gold, so a flourishing economy is bullish for the yellow metal.

Friday ended the week on a fairly sharp incline, probably influenced by the subtly bullish factors piling up throughout the week. These gains could spill over into next week.

Aug 12

Price of Gold Weekly Recap – August 5-8, 2013

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Monday Open: $1,302.30
Weekly High: $1,314.70
Weekly Low: $1,275.10
Friday Close: $1,313.20

Summer trading was fairly quiet for gold this week. Monday closed the first day of the week on a slight downturn, due to lack of fresh bullish news for precious metals. In related news, China’s economy reported growth on Monday, which could be bullish for gold in the long term, since China is the world’s second biggest buyer of the yellow metal.

Tuesday featured “Fedspeak” by Atlanta Fed president Dennis Lockheart, which also brought the market down. Lockheart made the statement that he expects the tapering program to begin by the end of the year. Tuesday’s gold market responded negatively to this statement, dropping gold to below the $1,300 mark to hit a new three-week low.

Wednesday recovered some of those losses in short covering after midday selling pressure had worn off. Overall, trading is still relatively quiet and uneventful during these “dog days” of summer, when traders in North America and Europe are vacationing and away from their computers.

Thursday was the best of the week for gold, shooting up above the $1,300 bar to overcome previous losses. The dollar contributed to this gain by hitting a six-week low overnight, and the European Union also released news that the economy was improving, a bullish factor for many markets.

Friday ended the week by consolidating the gains from Thursday to end on an overall higher note.

Aug 05

Price of Gold Weekly Recap – July 29-August 2, 2013

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Monday Open: $1,328.70
Weekly High: $1,336.40
Weekly Low: $1,285.10
Friday Close: $1,307.90

The week began in anticipation of major economic news the rest of the week and a high opening statement on Monday. The dollar hit a five-week low on Monday, causing gold to start out on a slight upswing. Tuesday flipped the switch and gold endured modest losses as those outside markets turned bearish – the dollar rose and crude oil sank.

The first big news of the week occurred on Wednesday when the FOMC released their minutes and some key U.S. economic data came out. Wednesday’s price of gold took a slip from these two points, mainly the latter. U.S. gross domestic product for the second quarter reported higher-than-expected numbers, ranking at 1.7$ instead of 0.9%. The monthly ADP jobs report also showed gains, reporting 200,000 new jobs instead of the expected 180,000. The FOMC minutes were still accommodative to gold, with Chairman Ben Bernanke waiting on pushing the tapering program ahead. The new expected start date for the long-anticipated change to Federal Reserve monetary policy, which would be extremely bearish for gold, has been now circulating as around September.

Thursday regained some of those losses as Europe started off on some positive trading deals with the U.S. and gold traders were bolstered by the final closing statement from Bernanke that came out after the traing day had ended. There was no mention of any start date for the tapering program in this statement, a good sign for gold bugs.

Friday, however, undid all the gains of the week and slipped down below the $1,300 mark on very strong U.S. economic data. U.S. manufacturing data and jobless claims reports pushed gold down, further exacerbating worries that positive economic reports will influence an earlier decision by the FOMC.

Jul 29

Price of Gold Weekly Recap – July 22-26, 2013

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Monday Open: $1,332.00
Weekly High: $1,347.00
Weekly Low: $1,311.20
Friday Close: $1,333.10

The price of gold fluctuated within a fairly small range this week, notably pushing above the $1,300 mark. Other than the news of breaking the $1,300 barrier, no major events contributed to the trajectory of the yellow metal this week. Perhaps because traders are starting to enter the summer doldrums, a time when the market slows as people enjoy their vacations, gold moved pretty slowly this week.

Monday exited the weekend with a solid jump beyond $1,300 to a four-week high, inflated by a weak dollar. Tuesday was quiet, with a few downward slumps on technical correction from Monday’s gain.

Wednesday also pulled some downside correction as the dollar regained its strength. Thursday righted those losses with a now sliding dollar, which hit a four-week low. Some jobless claims also came in at lower than expected. The end of the week was fairly quiet, boasting no major news in the global marketplace.

The next major talking point for gold is the Federal Open Market Committee meeting next week, and more U.S. unemployment reports.

Jul 22

Price of Gold Weekly Recap – July 15-19, 2013

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Monday Open: $1,283.10
Weekly High: $1,294.50
Weekly Low: $1,273.30
Friday Close: $1,294.90

The most dramatic shift in the price of gold happened this week on Wednesday, but no radical gains or losses were reported for the week overall.

Monday opened the week with short covering and bargain hunting to end the trading day slightly higher. Not too much global news impacted the prices early in the week, prices instead stagnating on anticipation of the Federal Reserve’s semi-annual address to the House of Representatives on Wednesday and Thursday.

Tuesday saw prices rise on increased stability of U.S. inflation pressures. Traders in the gold market banked on the expectation that the Fed wouldn’t start their bond tapering program as soon as previously expected. This theory is based on Chairman Ben Bernanke’s recent addresses, in which he has not indicated a certain time frame for ending the quantitative easing program.

Part of this is because the U.S. economy, though experiencing improvement, has not accelerated at a rate to deem higher interest rates appropriate quite yet. An unstable job market and low inflation are still the names of the game right now. Last week the gold market responded to the Fed’s slow movement with a 5% increase in prices.

True to expectations, Bernanke did not give any solid indication of when the tapering program might begin. Analysts are calling his address a wash, since no major changes are being made. The sharp drop on Wednesday can more be attributed to a high dollar and technical correction than to reactions to the Fed.

Thursday when Bernanke continued his address, the gold marketplace continued to report little to no reaction. Thursday ended a little higher from traders taking advantage of the brief price fall.

Friday was quiet overall, ending the week a few points higher than it began, pushed upward more by bullish outside markets than any major world news.

Jul 15

Price of Gold Weekly Recap – July 8-12, 2013

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Monday Open: $1,235.40
Weekly High: $1,298.00
Weekly Low: $1,233.70
Friday Close: $1,284.40

In light of all the major losses gold has been suffering lately, gold bugs will be happy to know that this week charted gains in the yellow metal’s corner. With a major spike caused by “Fed speak” on Thursday, gold is now reaching up toward the $1,300 mark.

Monday opened positively for gold, prices reacting to a slight slump in the dollar index after the greenback had hit a three-year high last Friday. Conflict in Egypt is still on the world’s radar, and while nothing extreme happened overnight, gold takes its place once again as a safety fund in times of crisis.

Tuesday’s price gains were caused by economic reports out of China that relayed higher inflationary rates in the country. China’s consumer price index for June was up to 2.7%, higher than the 2.1% of May and the forecast of 2.5%. Inflation, or the threat of inflation, brings more attention back to gold as a hedge fund.

The really big day of the week for gold was Thursday – the FOMC had a meeting on Wednesday, which consisted of more deliberation than action, and no conclusive evidence for any changes in Fed policy in the near future, which caused a major price jump on Thursday. One of the major issues of the meeting was how to convey the Fed’s policies to the public. What is now being called “Fed speak” to refer to the statements issued by Chairman Ben Bernanke is a good sign for gold right now. The result of the meeting is that now the Fed expects to employ its “tapering” program later instead of sooner.

Friday reported a few losses in mixed trading, but nothing too substantial to undo the gains from the day before.

Jul 08

Price of Gold Weekly Recap – July 1-5 2013

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Monday Open: $1,252.60
Weekly High: $1,263.00
Weekly Low: $1,209.80
Friday Close: $1,222.20

Gold continued its downward streak this week, but not without a little momentum upwards first. Monday opened the week on a sharp rally as traders jumped in to take advantage of some short covering from last week’s dramatic losses. The first day of the week hit the week’s high, and if the price would have continued upwards after that, it might have been a sign that gold would have hit its bottom, but Tuesday marked another decline.

The bargain hunting from Monday gave way to a strong selling pressure on Tuesday as the U.S. dollar pushed up to a four-week high. The U.S. dollar and the Federal Reserve’s plan to soon pull back on their quantitative easing program seem to be the major indicators of a continued loss for gold. As the U.S. economy improves, the yellow metal suffers losses as a hedge fund as traders venture into different territory.

Traders are also watching the political situation in Egypt, and the price of gold meandered a little higher by the end of Tuesday. If the crisis in Cairo reaches critical mass, gold could become desirable once again as a safe haven. China is also in gold news, as physical demand for gold seems to be petering off.

Markets went virtually unchanged Thursday, as U.S. trading took a pause on July 4th for the Independence Day holiday. Wednesday showed an equal amount of inaction as many traders started celebrating early.

Friday saw gold take a drop as significantly positive U.S. unemployment data rolled in. The unemployment report was very strong, marking an increase of 195,000 new jobs during the month of June, when only 155,000 to 166,000 were expected. The negative spin on a recovering economy is a lackluster performance from gold. However, analysts predict that even this news isn’t enough to push the Fed to start their tapering program right away, and put expectations for a start date around October.

Next week, focus will be on next moves from the Federal Reserve.

Jul 01

Weekly Gold Price Recap – June 24-28, 2013

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Monday Open: $1,282.60
Weekly High: $1,287.40
Weekly Low: $1,186.30
Friday Close: $1,233.00

The gold market experienced major losses this last week of June as the yellow metal once again hit a 3-year low. A far cry from the predictions of $2,000 per ounce made last year, gold is weighing in around $1,200 this week.

Monday saw gold fall about $20 to $1,277 as Goldman Sachs downgraded predictions for future prices, setting a new bar of $1,030 for the end of the year. The more stable economic situation in the U.S. and global markets are accounting for the major price drop in gold. Last Wednesday, Federal Reserve Chairman Ben Bernanke made the most explicit statement yet about pulling back on the quantitative easing program that has been in effect since 2008.

This zero-interest rate model has spurred gold to record levels in the past 5 years, as gold is non-taxed and often sought as a safe haven investment during times of economic turmoil, but now with an improving economy and lower unemployment rate, the end of these liberal economic measures is near. With the change in the economic landscape, traders are gravitating more towards higher returns elsewhere. Even the high demand for physical gold in India is not enough to put gold back at its previous high.

Gold has dropped 23% this quarter, losing about one quarter of its value since April. The yellow metal hit a fresh three-year low on Wednesday. Part of the dramatic pullback in the market is due to economic crises in China, commonly referred to as a “cash crunch,” which has drawn investors away from raw commodities.

The precious metal broke below the $1,200 barrier on Thursday for the first time since 2010. Analysts say that a continuing drop in gold should be expected. A professor of business at Duke University, Campbell Harvey, estimates the “fair value” of gold, or the average, to be about $800, which predicts even a ways to go before gold hits a plateau.

Friday marked the end of the second trading quarter of the year, with gold having dropped 30% since the beginning of 2013. The yellow metal is heavy in the news lately for the harsh beating it has taken since the “golden years” of 2011 and 2012, starting when gold hit a record high of $1,921 in September 2011, then continuing to remain in the upper reaches. Contrary to some hopeful analysts’ predictions, though, It never quite broke $2,000, and it is floundering at nearly half that now.

Jun 10

Price of Gold Weekly Recap – June 3-7, 2013

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Monday Open: $1,410.60
Weekly High: $1,417.00
Weekly Low: $1,378.40
Friday Close: $1,378.40

Gold experienced another faltering week, failing to break through the $1,350-$1,400 price bracket. Some traders were hoping to see the yellow metal push through by the end of week, but other forecasters are touting the end of the gold bubble and prices dropping down to $1,000 in the near future.

Monday saw slight gains as the dollar hit a three-week low. The whole week was primarily characterized by gold’s relationship to the dollar. China and Japan also lended some economic data to the short rise in gold at the beginning of the week, with stock markets from these countries fluctuating slightly.

Tuesday turned this gain around on a technical correction; traders started pulling out the market after Monday’s advance. Wednesday was also noneventful for the price of gold, as the market saw some gains, but was primarily focused on anticipating the Federal Reserve’s announcements on Thursday and U.S. monthly economic reports due on Friday.

The Federal Reserve meeting contained no surprises, and therefore did not affect the gold market. Thursday, however, spiked up to the week’s high as traders expected poor results from Friday’s jobs reports. A lower dollar supported this move, and the U.S. stock market was generally not performing well on Thursday, adding more reason to buy back into the safe haven of gold.

Yet, Friday undid all of these hopeful advances when the U.S. economic report announced growth in the manufacturing sector and one basis point of a percentage higher on the unemployment rate (now at 7.6%) as more people have returned to looking for work. Gold maintained steady Friday morning, ahead of the reports, but this precious metal quickly fell in the afternoon as the rally some hoped for did not happen.