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    JM Bullion Weekly Market Review (3/28/14)

    Gold prices are trading flat early on Friday as the trading week winds down. The bears remain in firm control of the gold market as prices continue to come under pressure after topping out recently near the $1400 level.

    This past week was a fairly busy week here in the U.S. data-wise. Markets have had plenty of things to digest including the latest readings on Q4 GDP, weekly jobless claims, consumer sentiment, durable goods and manufacturing data. The data essentially pointed to an economy that continues to mend, but perhaps is simply seeing some bumps along the way. The weekly jobless claims were an especially important number this week, as a better-than-expected reading in this number shows continuing improvement in the labor market.

    Although stocks have dipped a bit recently, it is difficult to tell whether a full blown correction is now getting underway or if this simply some profit taking and a pause before another leg higher. Although the market appears to be somewhat tired, it has proven to be very resilient and the underlying economic outlook may potentially drive stocks to new highs. Overall, risk appetite has remained quite robust-and it is somewhat difficult to make a bullish case for gold in spite of this.

    The situation in Ukraine continues to be a cause for concern for global markets, however, markets have thus far shrugged off the potential for further escalation. Should an escalation be seen in this situation, gold could potentially fall back into favor if a risk-off mentality takes hold.

    Global markets also continue to ponder the notion of additional stimulus coming from China and the ECB.  The ECB appears to be ready to fight the deflationary battle, as price increases continue to slip in the region. Chinese officials have stated that they feel growth needs to be maintained at a reasonable pace, and one has to wonder if or when the bank may act to fight the recent economic weakness that has been seen. The notion of further stimulus measures by central banks could potentially help support gold prices.

    Gold prices continue to trend lower on the daily chart. The market has now also broken below the psychologically important $1300 level. Although the market could have more downside to go, sentiment in the gold market does appear to be getting very bearish very fast, which could potentially work in the bulls’ favor. For now, the gold market appears to be seeing weakness based on the outlook for higher rates and a strengthening economy. Given the bearish technical momentum, the gold bulls may need some help from outside markets or further economic weakness in order to try and stop the bleeding.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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