Gold and silver prices continue to seek direction as they zigzagged again throughout the week. The news of the liquidity program, in which the ECB along with other central banks including the Federal Reserve will provide US dollar loans to European banks, may have calmed down traders; on the other hand, the increase in US inflation rate, along with the negative results of the Philly Fed may have adversely affected traders and may have helped gold and silver prices to remain high. Despite the high volatility of precious metals’ prices, they didn’t change much from their level at the end of August: Gold prices fell by only 0.9% and silver prices by only 2.2%. During last week, gold and silver prices changed directions (from green to red and vise versa) four times on a daily basis! The mixed signals that were running all week about the debt crisis in Europe and the progress of the US economy may have affected the stability in the financial markets. That being said, the recent rally in the US stock markets and the rise in long term US Treasury bills yields during most of last week, might suggest the some confidence was resorted to the markets and might explain some of the declines in gold and silver prices during the week.
Here is a short review of the changes in gold and silver prices during the week of September 12th to September 16th 2011:
Precious Metals Prices weekly summary:
Gold price slightly inclined by 0.08% during the week; on the other hand, this week’s average gold price of $1,813 /t. oz sharply declined by 2.09% from the previous week’s average price of $1,851 /t. oz. Gold price finished the week at $1,814.7 /t. oz.
Silver price, much like gold price, also inclined by 1.53% from beginning to end, but this week’s average price was $40.46/t oz or 3.48% below the previous week’s average $41.91/t oz.
During the week, the average daily percent change of gold price increased by -0.47%; silver price also declined by 0.35%.
In the chart below are the silver and gold prices that were normalized to 100 to the price at the beginning of the week – September 12th. It shows the weekly trend of gold and silver prices.
In the chart above gold and silver prices started the week rising and then changed direction and fell for the following days up to the Friday, when gold and silver prices bounced back; gold price ended the week with a very slight increase, while silver price finished the week clearly higher than the rate at the beginning of the week.
The last chart is of the daily percent changes of silver and gold prices (or in other words the price changes around the trend). It shows that gold and silver prices zigzagged throughout the week with no clear direction. The sharpest fall for gold price came on Monday and Thursday as it lost nearly 2.5% of its value each time, while silver price’s sharpest fall came on Monday with a 3.38% drop. The sharpest gains for both gold and silver prices came on Friday as they corrected to the sharp falls they have had the previous day.
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