Bullion traders had to endure the worst week for gold and silver especially in the last couple of days of the week. The financial markets started the descent on Thursday as US stock markets sharply fell; US Dollar sharply appreciated against major currencies; major commodities including gold and oil precipitately declined. Many attributed this sharp reaction in the financial markets to the disappointment from the Fed’s plan to purchase long term securities and no QE3 program. But the next day, most of the indexes and prices leveled out with oil prices slightly falling, but the bullion markets continued to fall very sharply: gold closed the last trading day of the week with a 5.85% drop and silver with a 17.71% decrease – the sharpest falls in a single day in 2011 for these precious metals. The free fall on Friday is partly due to the announcement made by CME to raise margin requirements for gold and silver contracts. These margin hikes will come into effect on Monday, September 26th.
Gold sharply declined by 7.82% during the week; this week’s average gold of $1,755 /t. oz sharply declined by 3.18% from the previous week’s average price of $1,813 /t. oz. Gold finished the week at $1,639.8 /t. oz.
Silver, even more than gold, also sharply decreased by 23.14% from beginning to end, and this week’s average price was 37.46/t oz or 7.96% below the previous week’s average $40.46/t oz.
During the week, the average daily per cent change of gold decreased by 1.97%; silver also declined by a very sharp rate of 5.62%.
In the chart below are the silver and gold that were normalized to 100 to the price at the beginning of the week – September 19th. It shows the weekly trend of gold and silver.
The last chart is of the daily per cent changes of silver and gold (or in other words the price changes around the trend). It shows that gold and silver started the week with moderate falls that changed on Tuesday and Wednesday to light gains; on Thursday and Friday gold and silver sharply fell. The sharpest falls for both precious metals came on Friday.
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