Gold and silver changed direction and fell very sharply mainly on Tuesday and Wednesday; these falls were probably stem by the recent margin hike by CME for trading gold, and the change in direction of the anticipation of Bernanke to issue another QE program. Chairman of the Fed didn’t commit to any future programs or stimulus plans, but also didn’t completely take it off the table. Some of the rally in the stock markets probably also helped the bullion market to lose ground during last week.
Gold decreased by 5% during the week; furthermore, last week’s average gold of $1,814 /t. oz slightly inclined by 0.67% from the previous week’s average price of $1,802 /t. oz. Gold finished the week at $1,797.3 /t. oz.
Silver followed gold price and also declined by 5.45% from beginning to end, but this week’s average price was $41.34/t oz or 1.95% above the previous week’s average $40.55/t oz.
During the week, the average daily per cent change of gold fell by 0.56%; silver also declined by 0.62%.
In the chart above, gold and silver had a sharp downward trend during the first half of the week that reached a weekly low on Wednesday; afterwards, gold and silver changed direction and picked up again during the second half of the week.
The last chart is of the daily per cent changes of silver and gold during last week (or in other words the price changes around the trend). It shows that gold and silver started off the week with moderate rises; on Wednesday they had a very sharp fall that followed with sharp gains on Thursday, mainly silver. By the end of the week they finished with moderate gains.
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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.