Gold Spot Price Open: $1,206
Gold Spot Price Close: $1,205
Change in Gold Spot Price: -$1
Silver Spot Price Open: $17.19
Silver Spot Price Close: $17.14
Change in Silver Spot Price: -$0.05
Gold and silver finished the week not having moved much on Friday from where they were on Thursday, but what little movement was recorded was mostly downward. When all was said and done, gold lost about one dollar while silver’s losses were closing in on ten cents for a majority of the day. Platinum and palladium had more clear-cut losses of more than ten dollars apiece.
Draghi Addresses EU Economies
There wasn’t all that much going on on Friday, but something that did catch the attention of investors was a speech made by European Central Bank president Mario Draghi. In his remarks, Draghi restated his desire for EU economies to reform, lest the region be subjected to years of incredibly tepid growth. With rampant unemployment across much of the EU economies, and investments into those economies at a minimum, Draghi maintained that some reform is necessary in order for the EU to recover at any type of respectable pace.
Draghi said that, “It should … be clear that the argument that accommodative monetary policy constitutes an excuse for governments and parliaments to postpone their reform efforts is incorrect. A cyclical recovery alone does not solve all of Europe’s problems.” Basically, what he is saying is that the EU’s recent economic problems are indicative of an overall deficiency in the economic system; one that needs to be changed. Still, with most EU countries not attempting to alter the way in which they operate their economies, it is likely that Europe will soon be facing a long, slow uphill battle to recovery.
Demand for Gold from Retailers, Jewelers Remains Sluggish
A report from South Africa alluded that this week’s stagnation on the part of gold is due to a global demand that is lackluster at best. Though gold has performed poorly for much more than this week alone, it is becoming apparent that the $1,220 mark is a point of technical resistance that gold cannot seem to overcome for any extended period of time. A growing global trend over the past few months has been a general lack of demand for gold by retailers and jewelers who tend to use the metal more than anyone else.
Though it is going to take a lot more than increased demand for gold to be able to hang on to gains for any extended period of time, increased demand from some of the big players in the retail industry would not hurt the metal going forward. With interest rate hikes more or less off the table for this summer, it will be interesting to see what the next few weeks have in store for precious metals. In a telling not released today, MKS Group said, “Gold continues to be drawn towards the $1,200 pivot point. The metal has failed to move more than 3 percent on either side of $1,200 since mid-March.” This is a very useful statistic, but does not tell investors anything they don’t already know.
Wrap-Up
Thanks to losses incurred throughout the week, precious metals are posting weekly losses for the first time in a month. Though still above the $1,200 mark, gold is in desperate need of some outside help in order for it to be able to break its recent trend of stagnation. As we look ahead to next week, you can expect a slow start to the trading week as the United States will be taking Monday off in order to celebrate the Memorial Day holiday. After that, however, all of the market’s attention will slowly but surely shift to the May installment of the FOMC meeting.
