Tag Archives: gold-dollar relationship

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.

Jun 03

Price of Gold Weekly Recap – May 27-31, 2013

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Monday Open: $1,394.50
Weekly High: $1,420.70
Weekly Low: $1,379.30
Friday Close: $1,385.50

The price of gold posted its 7th monthly decline in 8 months this week. Gold has always been volatile, but it seems as if this losing streak isn’t going to skyrocket upwards anytime soon.

Monday was a fairly complacent day, but Tuesday experienced some losses against the strong U.S. dollar. However, the losses were minimal for gold as compared with the relatively high place of the greenback, which is a good sign for gold.

Wednesday saw the yellow metal make some gains as the dollar dropped. U.S. Treasury bonds are rising in price this week, hitting the highest in a year, which is a sign of a recovering economy and increased likelihood that the Federal Reserve will soon start to change its loose monetary policy, a prospect that has been on the gold horizon for many months now.

Thursday saw gold continue its upward climb as Asian stock markets declined and sent some people back to the safe haven of gold. Thursday marked a fresh 2-week high for gold, but declined again on Friday on a technical correction. European stock markets reported high unemployment, the U.S. dollar index was firm, and the market place awaited economic data from China on Saturday. Also, the wedding season in India is now over, reducing demand for physical gold.

 

May 20

Price of Gold Weekly Recap – May 13-17, 2013

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Monday Open: $1,430.80
Weekly High: $1,430.80
Weekly Low: $1,372.30
Friday Close: $1,382.60

Gold experienced one of its worst losing streaks this week, breaking below the $1,400 barrier. The main reason for gold’s losses this week include a generally recovering world economy, specifically a steadily gaining dollar and record stock market highs, as well as indications from the Federal Reserve that the low interest rate policies will be slowly “tapering” out, as is the new buzz word around that topic.

Monday’s opening price of $1,430 was in fact the week’s high. This week marked the longest streak of price decline in four years, while the dollar is experiencing a 9.5 month high. This gold-dollar relationship is one key factor in the drop in gold. The greenback hit a strong stride this week in international affairs, gaining momentum as a more desirable investment than precious metals. The U.S. and Japanese stock markets are hitting significant (record or multi-year) highs, which moves investors away from safe haven assets.

On Wednesday, gold slipped below the psychological threshold of $1,400. Tuesday’s sell offs triggered some automatic sell-stops, and these continued through the rest of the week. There was no particular event or external factor that pushed the yellow metal through this barrier, but rather the continued selling pressure it has already been experiencing.

Another factor that is pushing the price point down is the anticipation of the Federal Reserve to gradually increase interest rates and pull back their quantitative easing program. The Wall Street Journal released a report Friday that confirmed Ben Bernanke and Fed officials have decided upon a strategy to slowly wind down the easy monetary policies. This has been on the horizon for a while, and sources indicate that 2013 will be the year that ends the 0% interest rates and bond-buying programs, or at least slows them down, which would be all around bearish for gold.

On Thursday, San Francisco Federal Reserve Bank President John Williams publicly expressed his tapering of the easy monetary policy. Friday closed the market with a seven-day losing streak and a 4-week low.

However, for all the downsliding in the gold market lately, there is still some demand for physical gold in India and China, especially jewelry, bars and coins.

May 14

Price of Gold Weekly Recap – May 6-10, 2013

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Monday Open: $1,462.00
Weekly High: $1,474.40
Weekly Low: $1,423.70
Friday Close: $1,444.10

Gold showed a pretty slow week between May 6 and 10, unable to break above technical price barriers. Monday began the trading week with slight gains based on the still-strong demand for physical gold and a weaker dollar.

Tuesday slumped down to $1,450. The name of the game Tuesday was equities, as traders had a risk-on mentality and turned to taking profits to invest in equities, which were at an all-time high. The dollar was also stronger Tuesday.

Wednesday saw the gold market improve a little from some short covering and better economic data from China and Europe. Since Tuesday’s prices dropped to a low, some traders took advantage of this and jumped in the market. The dollar was also weaker in the middle of the week.

Then, as soon as the price of gold makes some gains, it drops back down again. Thursday experienced some selling pressure and technical corrections from the previous day. Friday saw gold hit a two-week low, concurrently with Thursday night’s two-week high for the dollar. Certain unfounded rumors circulated Thursday night that indicated the Federal Reserve would put an end to its quantitative easing program soon, a rumor that is no good for gold. The bears are currently in the long-term technical advantage.

May 06

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

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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.

Apr 29

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

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Monday Open: $1,426.30
Weekly High: $1,482.40
Weekly Low: $1,412.70
Friday Close: $1,457.30

After last week’s drastic losses, gold has been making a strong recovery this week because of one primary reason: people are taking advantage of gold’s low prices and stocking up on physical bars and coins, especially in Asia and India. The physical demand for gold has offset some of the major losses incurred last week by stop-losses, U.S. economic recovery and the mass exodus of the market.

Monday opened the week with little movement. Tuesday saw a demand for physical demand start to grow very strong in India, as the low price of gold is coinciding with the anticipation of the Indian wedding season and the gold-buying Akshaya Tritiya festival in the middle of May. India is the world’s largest consumer of gold, so people are swooping in now while prices are low, thereby increasing demand and interest in gold. This demand helped rebalance the bearishness of gold’s position and counter the general skepticism in the gold market.

Some analysts believe that last week’s price fall was the bottom of the gold market, with gold prices set to return to higher trading levels on a cyclical rebound. A few global factors mildly influenced the price of gold this week, including the sharp drop of the yen against the dollar and the Japanese stock market, a new low for U.S. Treasury bonds and a record low of German bonds. These economic factors increased interest in gold as a hedge fund, and Wednesday and Thursday’s rise in the price of gold reflected this return.

A report from the International Monetary Fund also reported this week that Russia, Turkey and some Asian nations had increased their country’s stores of gold during the first quarter of the year, not taking into account April’s drop. Thursday also reported Spain’s higher-than-expected unemployment rate and the slight slippage of the U.S. dollar, contributing to renewed interest in the yellow metal.

So far, gold is experiencing a strong rebound, supported by a high demand for physical gold across the world. Small coins and bars are very popular right now, with American Gold Eagle coins leading the pack.

Apr 08

Price of Gold Weekly Recap – April 1-5, 2013

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Monday Open: $1,598.80
Weekly High: $1,602.70
Weekly Low: $1,542.80
Friday Close: $1,579.70

Despite continuing turmoil in North Korea and a few other global economic factors that might boost the price of gold as a safe haven, the yellow metal didn’t fare well this week. By mid-week, gold had hit a 10-month low, but gained enough to close the week in the $1,550 to $1,600 range.

Monday was a slow trading day due to the Easter holiday, but gold still took a modest gain from a weak dollar index and some safe-haven buying in response to the escalating conflicts in North Korea. The U.S. also released some economic reports from the manufacturing industry on Monday, which were lower than expected, also adding to the slight gains.

By Tuesday, however, the price of gold started to deteriorate and continued to plunge through Wednesday. No significant external price factors caused this tanking; heavy chart-based selling and automatic sell stop orders accounted for the sudden shift. General economic gains across the developed world may have a long-term impact on the lessening of interest in gold. Surprisingly, conflict in North Korea has not led to droves of demand for the safety of gold. Wednesday’s price point was a fresh 10-month low.

Thursday remained primarily unchanged, though a weaker dollar index pushed the price up to keep it around a level $1,555. Gold traders are tending to sell of their Exchange Traded Funds (ETFs) in the gold market, according to reports on the first quarter of 2013. However, some bargain hunters are also entering the market to pick up physical gold.

Gold took a slight boost on Friday as weak U.S. employment data hit the news stands, indicating that the Federal Reserve will most likely not change their loose monetary policies anytime soon. The week’s dip in prices is also leading to increased interested in physical gold, especially in India and China.

Mar 18

Price of Gold Weekly Recap – March 11-15, 2013

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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.

Mar 11

Price of Gold Weekly Recap – March 4-8, 2013

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Monday Open: $1,574.60
Weekly High: $1,584.50
Weekly Low: $1,566.30
Friday Close: $1,578.10

Gold experienced some modest ups and downs this week, but nothing occurred to dramatically alter the price bracket, so the yellow metal ended the week nearly the same as it began.

Monday opened pretty flat, trading around a solid $1,575. Strong economic news from China and steady gold demand continued through to Tuesday, when fresh economic stimulus measures were announced to boost the economy up to a targeted 7.5% GDP. This is a bullish factor for the raw commodity sector, as well as stocks worldwide. However, the price gain was kept in check by the news that the Dow Jones Industrial Average hit a new all-time record high, which drew interest toward riskier endeavors and away from safe haven investments like gold.

Wednesday saw some gains after the Federal Reserve released news that their economic reports only show moderate to modest economic growth, not enough to put a halt to the aggressively low monetary rates that are currently in place. Gold bugs are delighted on this news because loose Fed policy helps keep gold relevant as a hedge fund.

Thursday held on pretty steadily, with some impetus in trading from a lower U.S. dollar and some positive economic developments in Europe. Mostly, though, traders were awaiting Friday’s employment reports for the month of February.

The sharp dip in prices on Friday was indeed due to Friday’s morning reports of better-than-expected jobs growth and declining unemployment rates. Friday hit a fresh two-week low, but quickly rebounded on short-term bargain hunting and opportunist market-seeking to close the week slightly higher than it began.

Feb 04

Price of Gold Weekly Recap – January 28-February 1, 2013

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Monday Open: $1,654.50
Weekly High: $1,681.90
Weekly Low: $1,654.50
Friday Close: $1,667.90

It was a good week for gold after many U.S. economic reports and the Federal Reserve’s regular meeting concurred that the U.S. economy is not yet in a state of repair strong enough to push down gold. Following a bearish decline from last week, this week closed on a higher note than it opened.

Monday started off sluggish, a little flat on a relatively strong dollar. Most of Monday was spent in anticipation of news to come later in the week. Tuesday rallied a little bit as the dollar sunk slightly, and a Consumer Confidence report revealed worse than expected economic data – a 58.6 rating, well below the 64.0 expected mark.

Wednesday was the real day of growth for gold this week. The price of gold was bolstered by the Federal Reserve’s FOMC meeting, in which Chairman Ben Bernanke reiterated the low interest rates and bond-buying program that was set in motion at the end of last year. Concerns have arisen lately that the Fed might pull back on their quantitative easing should the economy show considerable improvement, but the U.S. GDP report released this week showed that the country’s economy had actually contracted 0.1% in the fourth quarter of 2012. Bernanke confirmed that interest rates would remain negligible until unemployment hits 6.5%.

Unfortunately for gold, the yellow metal gave back all its gains on Thursday, despite bullish factors in the marketplace like a weak dollar and poor economic data. Though no one single external factor can be pinpointed for this loss, the drop was probably due to profit-taking from short-term traders.

Friday saw a continued release of negative U.S. economic data, which gave a small spike to the price of gold. The U.S. jobless claims report missed their mark by 38,000, ticking the unemployment rate up to 7.9%. However, later in the day a stronger manufacturing report was released, undoing many of the slight gains that had occurred earlier in the day.

Next week, gold is predicted to stay in the $1,650 to $1,700 range, with the European Central Bank meeting on traders’ radar.