The prices of gold and silver started off the week rising only to change direction and fall coming Tuesday. In his recent testimony at the Hill, Bernanke remained dovish about the monetary policy of the Fed and kept defending it and stating this expanding policy could go on for a long time. In the U.S several reports came out and showed some signs of growth to the economy: the manufacturing PMI increased to 54.2 as of February; the second estimate of the fourth quarter of GDP was revised upwards to 0.1% gain; jobless claims changed direction and fell by 22k to reach 344k. The sequester came into play starting March 1st. This will include $85 billion spending reductions in 2013. If Congress won’t replace the sequester by the end of the year, the plan will automatically cut the federal budget by $1.2 trillion in the next decade. In China, the manufacturing PMI report came out and showed a modest drop to 50.1 in February – the lowest index in five months. This means the manufacturing sectors in China are expanding at a slightly slower rate. In Europe, the Euro currency declined during last week along with other currencies such as the Aussie dollar against the USD. The developments in the forex markets may have also partly affected the path of precious metals. By the end of the week, the Euro/USD fell by 1.3%; the Aussie dollar also depreciated by 1.13% against the USD. Finally, gold inched down by 0.03%; silver, by 0.03%.
Here is a short recap of the changes in precious metals prices between February 25th and March 1st:
Precious Metals Recap:
Gold price inched down during last week by 0.03%; alternatively, during said week, the average rate reached $1,589.18 /t. oz which was 0.06% above last week’s average rate of $1,588.22 /t. oz. Gold ended the week at $1,572.3 /t. oz.
Silver, much like gold, edged down during the previous week by 0.03%; further, the average rate decreased by 0.7% to reach $28.81/t oz compared to last week’s average $29.01/t oz.
During last week, the average daily percent shifts of gold reached 0.002%; silver had an average daily changed of 0.003%.
The chart below presents the changes of precious metals, as their prices are normalized to 100 as of February 22nd. Gold and silver prices have had an unclear trend during the week.
The second chart shows the daily percent changes of precious metals (or in other words the changes around the trend). Silver and gold had an unclear during last week. Precious metals prices daily percent changes ranged between nearly 1.85% gain and a 1.8% loss.