Tag Archives: hedge fund

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.

Jan 04

Price of Gold Weekly Recap – December 31, 2012-January 4, 2013

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Monday Open: $1,675.20
Weekly High: $1,689.50
Weekly Low: $1,628.00
Friday Close: $1,651.70

Gold ended 2012 with a 12 year hot streak. The past decade has treated gold very well, and this yellow metal has been the talk of the town amid a global recession. Seen by investors as a safe haven, gobbled up by governments as alternative currency and watched by many as an indicator of economic turmoil, gold has had a large role in global finances in the past ten years. Although gold closed this year nearly $300 below the all-time high of $1,900 from 2011, the price of gold is still at a remarkable high, and boasts a 6% increase from the price at the end of 2011.

The markets were silent Monday and Tuesday for the New Year holiday, but reopened with a bang on Wednesday. Starting the year off right, gold responded well to the announcement on Monday that U.S. policymakers had reached an agreement regarding the fiscal cliff. Wednesday saw this week’s high of around $1,690. The fiscal cliff agreement, which had worried investors and citizens alike, rallied a global spike in trading around the globe.

Thursday, however, gold started to dip after better-than-expected unemployment data for the U.S. was released. A firmer dollar also slipped gold down a little, as these factors lessen the strength of gold as a safe haven investment.

Friday also saw losses in the gold market as investors worriedly responded to the previous day’s Federal Reserve meeting, in which members expressed mixed ideas about keeping the loose monetary policy that had been in place all of 2012. After the prolonged fiscal cliff agreement (a decision wasn’t reached until after December 31st, the cutoff date) Federal Reserve members discussed shortening the length of time for the previously decided mortgage-backed securities and long-term Treasury bonds. Some believe the policies should last until the end of 2013, some think they should end before the year, and some think there even needs to be further measures implemented.

These loose monetary agreements keep interest rates low, which at once help the economy bolster back but also create conditions rife for inflation, a positive sign for the hedge fund gold. With stricter Fed policies, gold may not be seen as such a secure hedge fund. Friday saw prices drop to the lowest since August. Gold investors will be keeping a very close eye on the Fed’s moves.