Gold and silver changed direction and tumbled down during last week. The most notable event of last week was the decision of the newly appointed Chair of the Federal Reserve Janet Yellen to taper again the Fed’s QE3 program by another $10 billion to $55 billion a month. This decision along with the FOMC’s guidance of maintaining its rate unchanged in the near future has slashed down the prices of gold and silver. Further, the U.S dollar also changed course and sharply appreciated against leading currencies including Euro, Aussie dollar and Japanese yen may have also contributed to the decline of precious metals prices. In the U.S several reports were released and showed some progress in the U.S economy: U.S building permits rose by 7.7% during February, while housing starts inched down by 0.2%; the consumer price index increased again by 0.1% and the core CPI by 0.1% – the annual core CPI was still low at 1.6%; the Philly fed index bounced back from -6.3 in February to 9 in March – this means the manufacturing sectors are progressing; finally, jobless clams slightly rose by 5k to reach 320k. Most of these reports especially on housing and manufacturing were positive and may have contributed to the recent fall of gold and silver prices. By the end of the week, gold price dropped by 3.12% and silver by 5.16%. The recent tumble of silver put its price 4.4% lower than its initial price at the beginning of the month.
Here is a short overview of the latest developments in precious metals prices between March 17th and March 21st:
Precious Metals Overview:
The price of gold decreased by 3.12% last week; moreover, during last week, the average price reached $1,347.94/t. oz which was 1.03% lower than last week’s average rate of $1,362.02/t. oz. Gold ended the week at $1,336 /t. oz.
The price of silver, even more than gold, plunged by 5.2%; further, the average weekly rate was $20.72/t oz, which was 1.89% below last week’s rate $21.12/t oz.
During last week, the average daily percent changes of gold were -0.63%; silver had an average daily change of -1.05%.
The chart below presents the shifts in precious metals prices, in which they are normalized to 100 as of March 14th. Gold and silver had a downward trend during last week.
The second chart presents the daily percent shifts of precious metals prices (or in other words the changes around the trend). Silver dropped mostly on Tuesday and Thursday. Gold fell mostly on Tuesday and Wednesday. The daily percent changes ranged between -1% and 0.4%.