Gold and Silver Market Update (2/7/2015) – Golden Eagle
For the second week in a row the precious metals market has turned in a weak performance, with most prices falling again. The only exceptions were rhodium, which once more managed to rise, and palladium. However we’re still not feeling too pessimistic, as the general economic climate suggests metals are going to be in increasing demand over the next few months; low prices now just mean an opportunity to build up stocks economically.
Starting with gold, the spot price dropped to around the $1,260 mark on Monday then stayed quite static for most of the week. On Thursday there were hints it might be edging upwards but Friday, in a pattern repeated across most market sectors, saw another sharp drop. In all gold lost a fraction under $50 to close at $1,233.30, its lowest price since mid-January. The trend is now firmly downwards for the moment but as long as the Dow Jones remains volatile there’s no real reason for that to continue. For now don’t rush to sell off your gold, and consider buying if the price drops below $1,200.
Silver looked to be doing quite well for most of the week, rising as high as $17.62 at one point, but it also dropped abruptly on Friday to end the period at $16.685. That’s a fall of 54 cents over Monday’s price and it’s caused some jitters, coming on top of a long period of volatility and alarming drops. However the futures market remains bullish, with a long-short ratio of close to 5:1. That confidence could evaporate quickly if speculators sense an inflated price, but in fact we think silver is still undervalued.
Platinum looked to be having a good week up to Friday morning, picking up more than $30, but once more Friday saw the price fall away. It closed at $1.220, $18 below the previous week, which was a serious disappointment after it looked like taking back the ground it lost the week before. However there’s a good chance this was just a temporary setback caused by Friday’s general losses, and not an underlying issue with platinum itself, so hopefully it will climb again this week.
After its relatively strong performance in late 2014 when the other metals were struggling palladium was one of our favorite commodities, but it’s been downgraded so far this year. It did manage to regain some ground last week but, again, fell off on Friday. The final price for the week was $782, $13 up on the week before. That rise was down to some gains in weekend trades, leaving it slightly ahead even though Friday’s price was below Monday’s opening.
Finally rhodium, which we think is still seriously undervalued, sat at $1,180 for most of the week before rising to $1,190 on Thursday and staying there until the markets closed. That’s $53 up on the previous week.
The equities market performed well for most of the week, which probably helped bring most metals down, although the Dow had its own setback on Friday. It’s also likely that rebounding oil prices are attracting investment that would otherwise have gone to gold and silver. In general we think the outlook for precious metals is still generally healthy, so despite generally poor figures last week there’s no need to panic just yet.
About the Author: Clint Stelfox
Clint is the director of marketing at Golden Eagle Coins. Son of Richard Stelfox, co-founder of the company, Clint has been living and breathing coins his entire life. After trading for a Philadelphia Stock Exchange firm for several years Clint returned to give Golden Eagle the online presence it has today. 
