Precious metals took another dive during the first week of July. This fall coincided with the decline in many other financial markets such as oil, U.S stocks etc. The two main events of the week that contributed to fall of bullion rates were the ECB rate decision on Thursday and the U.S employment report. ECB has decided to cut the interest rate by 0.25pp to 0.75% – its lowest rate level. This news adversely affected not only the Euro/USD but also other markets such as stocks and commodities. The following day the U.S non-farm payroll report came out. This time many had anticipated the report will be positive and show a high growth in employment compared to recent months (at least 120k+) but this wasn’t the case. Employment expanded by only 80k. This news tends to be negatively correlated with bullion, but this time it adversely affected gold and silver. This may be due to the shift in market sentiment about the possibility of another QE program in the near future. Further, the Euro/USD also declined on Friday and may have also contributed to the decline in major commodities rates including gold, silver and oil.
By the end of the week, gold fell by 1.58% and silver by 2.51%.
Here is a short recap of the changes in Bullion between July 2nd and July 6th:
Precious Metals Recap:
Gold price decreased during last week by 1.58%; alternatively, during said time the average rate reached $1,605.92 /t. oz which is 1.69% above the previous week’s average rate of $1,579.26 /t. oz. Gold finished at $1,578.9 /t. oz.
Silver, much like gold, declined on a weekly scale by 2.51%; furthermore, the average rate reached $27.73/t oz which is 2.25% above the previous week’s average $27.12/t oz.
During last week, the average daily percent change of gold reached -0.31%; silver also fell by an average 0.49%.
The chart below shows the changes of precious metals, as their rates were normalized to 100 to June 29th. Bullion prices have started off the week rising but soon shifted and tumbled down on Thursday and Friday.
The second chart presents the daily percent shifts of precious metals (or in other words the shifts around the trend). Bullion prices didn’t do much during the first day of the week; on Tuesday both metals hiked. Before the fourth of July both metals were in the green on a weekly scale. But on Thursday and Friday the bullion market, much like many other markets including other commodities and U.S stocks, tumbled down; the news of the ECB rate cut and the disappointing U.S labor report may have contributed to the decline in commodities rates. Precious metals daily percent changes ranged during the week between nearly 3% gain and 2.7% loss.