Major commodities dropped substantially at the end of last week, on November 12th before the bell rang. I have reviewed the fluctuations of energy commodities including crude oil prices and natural gas prices in a previous review. This is also true for the precious metals, including Gold and Silver. In regards to the Gold prices, after a big rise in the beginning of the week and also through the second part of the previous week, it dropped substantially by nearly 2.7%. In the Silver prices, the fall was even harder as it plummeted by 5.34% on Friday, reaching a price of 25.942 $/t oz.
In the following table I present the main highs and lows along with the averages of gold prices and silver prices as well as percent changes.
*This figure is calculated based on the percent change from the price at the beginning of the week compare to the price at the end of the week
I have also added a graph in which gold prices and silver prices are normalized in the following way: the price of each commodity is normalized to 100 for the price as of 8th of November – the beginning of the week.
In the final graph you can see the daily percent change of these precious metals for last week.
What is the reason for such a speculative move? According to Bloomberg, the reason is the same as for the drop of the rest of major commodities – the speculation around the expectations of China raising its interest rates. I think that this speculative move is not clear and there could be some additional plays occurring. I will refer to this issue in later posts. For now we will have to blame this drop in gold and silver prices on China.