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Gold and Silver Market Update (9/21/14) – Golden Eagle

September 21, 2014 0 Comments

This has been a bad week for all the precious metals with the exception of rhodium; everything else lost value, and in the case of silver the losses were worse than anything we’ve seen for quite a while.

The gold price dropped right through the $1,225 mark, where some analysts expected support to show up, and ended the week at $1,216.20, a drop of almost exactly 1% over the period. The only good news is that’s a lot less than it fell the week before. It’s hard to say if that means the decline is bottoming out but if no base appears at $1,200 it could be heading for its lowest price in at least a year. Anything below that seems unlikely just now but with the way the market has been recently it’s impossible to make any firm predictions.

The picture with silver is even less upbeat. From a starting price we think was already undervalued it went down a full 63 cents to close at $17.79, approaching where it was in 2010. It’s possible that the silver prices have been falling long enough and consistently enough to wear down confidence, because while the economy isn’t ideal for precious metals it’s not divergent enough to explain a loss of this magnitude in a week. The worst case is that investors panic and offload stocks, driving it down potentially as low as $16.

Platinum followed a similar track to gold, losing $30 to close at $1,333. That was only slightly less than it shed in the previous period and even though there was a slight uptick on Monday the general course was exactly the one it’s been following since the first week of the month. Without some change in the markets to turn that around we could see it diverge from gold again if the yellow metal manages to find some support.

Monday’s trading saw a slight rise in palladium prices but that quickly turned around and it fell for the rest of the week, with the downslope steepening on Friday. The final price was $809, $22 down on the previous period. That’s a much smaller drop than the period before and there’s no sign of demand from industry slowing down so palladium is a good candidate for a recovery soon.

Finally the success story – rhodium. Things are looking much better here, with a $100 rise over the week to close around $1,290. That means it’s now selling for more than gold, which it also achieved briefly in August but definitely isn’t the normal order of things. There’s a good chance they’ll switch back round this week so this could be a good time to sell and invest in gold to cash in on a recovery.

The main driver behind the slump in metal prices is most likely the recovery of the US dollar, which is riding high against most other benchmark currencies. The equities market also seemed to pick up some more steam last week with the Dow Jones and FTSE 100 both showing signs of breaking out of the lethargy that’s held them for the last few weeks. The next big decider for metals will probably be the Q3 growth figures when they come out in October.

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Filed in: Market Updates

About the Author:

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.

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