Gold and Silver Market Update (7/5/14) – Golden Eagle
There’s been little movement on precious metal prices this week despite some daily peaks and troughs. Both silver and gold climbed on Tuesday after a weak start, fell back then rallied again towards the end of the period. Just like last week silver’s recovery looked stronger than gold, but both finished with spot prices very close to where they started – gold rose $1.40 to $1,320.40 while silver closed up 14 cents at $21.09.
As we said last week, in the current market conditions we’d actually expect metal prices to be falling so the fact that they’ve made even modest gains is interesting. Instability in Iraq and Ukraine is rattling confidence in two of the world’s biggest oil exporters right now, and the price of a barrel of crude finished the week up almost 15 percent to close at over $104. That sort of gain makes oil look far more attractive than other commodities and normally you would expect to see a move out of metals to cash in on the petroleum market. That doesn’t seem to have happened to any great extent though.
At the same time nonfarm payroll figures were released on Wednesday, so anything that happened to metal prices before then shouldn’t be taken too seriously when it comes to making predictions. As it turned out the employment situation is reasonably good, with more than 200,000 people more in work in June over May’s figures. That probably helped maintain confidence in stocks, which have been doing surprisingly well considering the slow pace of economic recovery. With equities reasonably healthy there’s less demand for a safe haven like precious metals.
On the other hand continued uncertainty about medium-term output from South Africa’s mines has had an effect. Palladium climbed steadily through the week, finishing almost $20 up at $861.08 while platinum peaked at $1511 on Tuesday before dropping back slightly to end the period at $1,495 – again, close to $20 above last week’s closing price. It’s possible that the conflict between Russian and Ukraine, and the possibility of further sanctions against a major gold producer, is having a similar effect; that could be helping to maintain prices. The strongest argument against that is its failure to explain why silver’s holding its value as well.
For whatever reason it seems that demand for gold and silver is holding up despite an overall market condition that should be depressing them. That means it’s probably too soon to think about selling – although for silver at least that would be the conventional advice based on moving averages. If the upward pressure is enough to maintain prices right now then it has the potential to drive them a lot higher when oil levels off, so in fact now might be a good time to increase metal stocks rather than sell off what you have. Silver isn’t far above a two-year low anyway so a rise looks likely at some point, and with the price still around the $21 mark it’s tempting to purchase.
Overall we think the prospects for precious metals are very positive right now. The last few weeks have been unexceptional but if there’s a big move in the near future we expect it to be upwards.
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. 
