Is the golden era of gold and silver behind us? Last week’s sharp fall in the prices of gold and silver might suggest so. Their tumble coincided with the decline of other commodities including oil, U.S equity markets and leading currencies against the USD. This systematic fall in the markets might suggest room for correction in the coming weeks. The main issue in the U.S was the FOMC statement that came on Wednesday. The Fed left its policy unchanged but the main issue was Bernanke’s press conference that followed, in which he stated the Fed may taper QE3 by end of 2013. This was enough to drag down commodities and equities down and the US dollar up. On Thursday, it was also reported that China’s credit squeeze, in which Chinese banks have lowered their lending volume, may have also pressured down the markets. Moreover China’s flash manufacturing PMI slipped in June. In other news: Jobless claims rose by 18k to reach 354k.
By the end of the week, the Euro fell by 1.69% against the USD; the Aussie dollar tumbled down by 3.67% against the USD. Gold price plunged by 6.91%; silver, by 9.09%.
Here is a short analysis of the developments in precious metals prices between June 17th and June 21st:
Precious Metals Recap:
Gold price sharply declined last week by 6.91%; moreover, during the week, the average price reached $1,340.20 /t. oz which was 3.18% below last week’s average rate of $1,384.20 /t. oz. Gold ended the week at $1,291.7 /t. oz.
Silver, even more than gold, plummeted during last week by 9.09%; further, the average weekly rate was $20.97/t oz, which was 3.73% below last week’s rate $21.78/t oz.
During the previous week, the average daily percent changes of gold reached -1.388%; silver had an average daily change of -1.831%.
The chart below shows the shifts in bullion rates, in which their prices are normalized to 100 as of June 14th. Gold and silver prices tumbled down mainly on Thursday.
The second chart presents the daily percent changes of precious metals rates (or in other words the shifts around the trend). Silver and gold didn’t do much at the beginning of the week but on Thursday they have plummeted. Precious metals prices daily percent changes ranged between 0.5% gain and 8.3% drop.
For further reading: