Precious metals prices started off the week with little movement despite their sharp rise during last Friday following the disappointing U.S employment numbers. The premise behind this speculation was that since the U.S economy is showing signs of slowdown, this could push the Fed towards issuing another stimulus plan, which will help rally gold and silver. This idea took a hit in the chin when Bernanke testified in the Senate on Thursday; he stated economic conditions are improving mainly the U.S real estate market; he also said the U.S labor market isn’t in such a dire condition as many had claimed; he voiced his concerns revolving the European debt crisis; he didn’t refer to any additional plans the Fed might consider in the future and as usual kept the door open on QE3. This testimony brought down the renewed hopes of another QE3 and thus dragged down precious metals prices.
It was also reported on Thursday that Bank of China cut the interest rates by 0.25 percent points to 6.31 for the first time since 2008. This signaled the economic conditions in China start to worry BOC. This news may have also helped pull down commodities prices. On Thursday it was reported that Jobless claims decline to 377k. Finally on Friday the U.S trade balance report came out and showed the goods and services deficit decreased during April to $50.1 billion.
By the end of the week, gold declined by 1.89% and silver by 0.14%.
Here is a short recap of the changes in Bullion between June 4th and June 8th:
Precious Metals Recap:
Gold price edged down during the first couple of days of the week but tumbled down on Thursday. During last week it decreased by 1.89%; alternatively, during said time the average rate reached $1,608.88 /t. oz which is 2.16% above the previous week’s average rate of $1,574.84 /t. oz. Gold finished at $1,591.4 /t. oz.
Silver, much like gold, decreased on a weekly scale by 0.14%; on the other hand, the average rate reached $28.47/t oz which is 1.76% above the previous week’s average $28.09/t oz.
During last week, the average daily percent change of gold fell by 0.37%; silver leveled out on an average daily rate.
The chart below shows the movements of precious metals, as their rates were normalized to 100 to June 1st. Bullion prices have nearly didn’t move on Monday and Tuesday; on Wednesday silver spiked, but on Thursday both precious metals tumbled down.
The second chart presents the daily percent changes of precious metals (or in other words the shifts around the trend). Bullion prices didn’t change much between Monday and Tuesday; their sharpest movement came on Wednesday and Thursday. Their daily percent changes ranged between nearly 3.8% gain and 3.25% loss.