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Weekly Gold & Silver Market Recap – 3/1/2013
March 1, 2013GOLD GAINS AT BEGINNING OF WEEK
Gold began the week strong as the prices rebounded from a seven-month low during the week ending February 22. There is still uncertainty in the marketplace there is a growing sentiment that the price of Gold is moving upward. “After the drop, hopefully the worst is over for Gold, although the support is still at $1,527. I believe (after) a break above $1,585, you might see a trend that it should test $1,600,” managing director of GoldSilver Central Pte Ltd in Singapore Brian Lan said. While the lower prices have changed some outlooks for the coming year, the long term is still positive. “While we have downgraded our near-term views, Gold prices should accelerate in the second half on improving demand from India and China.”
GOLD HAS LARGEST ONE-DAY JUMP OF 2013
The yellow metal continued its success with Tuesday gains as investors rushed back to the safe haven once Federal Reserve Chairman Ben Bernanke began his two day congressional testimony. In response to Bernanke’s testimony regarding the Fed’s ongoing quantitative easing program, Gold experienced its largest one-day jump of 2013. Appearing before the Senate Banking Committee this morning, Bernanke indicated that he supported continuing the current bond-buying program. Gold has historically benefited from such policies due to concerns that easing will lead to a weaker dollar and inflation, which Gold is often used as a hedge against. Gold ended the day above $1,600 per ounce. Silver and Platinum ended the day up as well, with Palladium the only metal that dropped.
PRICES DROP WITH ONGOING OPTIMISTIC U.S. ECONOMIC DATA
Wednesday morning, the Precious Metals market began to feel the impact of positive U.S. economic news and profit taking from Tuesday’s increase, which ultimately pushed prices down. Orders for durable goods fell 5.2 percent in January, mostly due to declines in defense and commercial aircraft orders. When those specific items are removed, there was actually a rise in orders for the fifth straight month. The Bloomberg Consumer Comfort Index, which measures consumer confidence, rose from minus 33.4 to minus 32.8 for the week ending Feb. 24 as Americans begin to view the U.S. in a better light. Also, jobless benefit applications decreased by 22,000 last week to 344,000, which was better than economists expected. “The economy actually seems to be holding up reasonably well even though it's facing some real challenges,” said Lou Crandall, chief economist at Wrightston Icap LLC in Jersey City, New Jersey, and the second-ranked forecaster for jobless claims, according to data compiled by Bloomberg. “The labor market has been continuing to improve, not rapidly, but certainly more than you would have expected.”
IS GOLD’S BULL RUN OVER?
Gold bugs and novices alike are looking at the recent five month decline in the Gold price, wondering if the historic decade-long bull run is finally over. While there is no crystal ball to read the future, we can look at factors contributing to the more than 10 years of bullish prices. Some of these factors, such as central bank monetary policy, currency fluctuations, asset relocation and geopolitical unrest have been mostly constant in how they affect the demand for Gold. Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider, said, “…the bullish drivers of Gold haven’t changed at all for several years.” She goes on to say that the Gold bull run isn’t over, it just isn’t in a hurry to get where it’s going. One of Gold’s strengths is its inverse correlation to the U.S. dollar as the dollar has been showing some strength lately, investors have been more confident in their riskier investments and have moved some of their monies back into equities.
At 5 p.m. (EST), the APMEX precious metals spot prices were:
- Gold, $ 1,577.30, Down $ 2.80.
- Silver, $ 28.61, Up $ 0.15.
