Posted on June 28, 2013
Gold Spot Price Open: $1,226
Gold Spot Price Close: $1,235
Change in Gold Spot Price: +$9
Silver Spot Price Open: $18.81
Silver Spot Price Close: $19.67
Change in Silver Spot Price:+$0.86
Gold and silver posted some modest gains on Friday to shed a positive light on an otherwise dismal week for precious metals. On the day gold picked up about 9 dollars while silver gained a little over 80 cents.
This week simply highlights how badly gold and silver have been doing in the first part of 2013. The first 6 months of the year has seen gold lose about 30% of its value with a majority of those losses being posted in the second quarter alone. With the Fed contemplating putting an end to monthly bond-buying and Quantitative Easing, these losses might be added upon. Ben Bernanke’s comments last week and Dennis Lockhart’s a day ago have prompted investors to get rid of their gold and silver holdings in massive quantities.
Diminished Asian demand has also played a major role in gold and silver falling and staying in their downtrodden positions. When we saw precious metals take the dive they did in April, increased bargain hunting helped soften the blow. This time bargain hunting is sparse, especially in places like India and China where tariffs and cash shortages have prevented the average citizen from having the ability to take advantage of such low prices.
While the US is talking about tightening their monetary policies, most other central banks around the world are discussing plans to maintain their accommodating policies. Especially in Europe where only a few days ago we heard Mario Draghi, head of the European Central Bank, announce that monetary policy in his region will remain the same for the time being.
It will be interesting to see what the weekend holds for precious metals, though I wouldn’t expect any major gains to be made. The hope among investors is that gold and silver will hear some good news next week and while a full recovery may not be in the immediate cards, hopefully the blow metals have suffered this week will be softened.