Gold and silver continue to seek direction throughout the week. The news of the liquidity program, in which the ECB along with other central banks including the Federal Reserve will provide US dollar loans to European banks, may have calmed down traders; on the other hand, the increase in US inflation rate, along with the negative results of the Philly Fed may have adversely affected traders and may have helped gold and silver to remain high. Despite the high volatility of precious metals’ prices, they didn’t change much from their level at the end of August: Gold fell by only 0.9% and silver prices by only 2.2%.
During last week, gold and silver changed directions (from green to red and vise versa) four times on a daily basis! The mixed signals that were running all week about the debt crisis in Europe and the progress of the US economy may have affected the stability in the financial markets. That being said, the recent rally in the US stock markets and the rise in long term US Treasury bills yields during most of last week, might suggest the some confidence was resorted to the markets and might explain some of the declines in gold and silver prices during the week.
Gold slightly inclined by 0.08% during the week; on the other hand, this week’s average gold of $1,813 /t. oz sharply declined by 2.09% from the previous week’s average price of $1,851 /t. oz. Gold finished the week at $1,814.7 /t. oz.
Silver, much like gold, also inclined by 1.53% from beginning to end, but this week’s average price was $40.46/t oz or 3.48% below the previous week’s average $41.91/t oz.
During the week, the average daily per cent change of gold increased by -0.47%; silver also declined by 0.35%.
Gold and silver zigzagged throughout the week with no clear direction. The sharpest fall for gold came on Monday and Thursday as it lost nearly 2.5% of its value each time, while silver’s sharpest fall came on Monday with a 3.38% drop. The sharpest gains for both gold and silver came on Friday as they corrected to the sharp falls they have had the previous day.
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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.
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