Gold and Silver Market Update (12/21/14) – Golden Eagle
Last week’s news from the precious metals market is a lot more mixed than the one before, with gold and silver both down sharply – though not to their previous lows – and inconsistent performance across the platinum group – some gains, some inconclusive figures. Overall we’d say it comes down on the bad side of the balance, but not by a lot; we’ve certainly seen a lot worse this year. A good week for equities meant it was never going to be spectacular for commodities and the strong dollar is also putting off some overseas buyers, but oil was down yet again and that – together with lingering worries about the strength of the recovery – seems to be building up some support. It’s at lower prices than we’d like but it is there and there are a few things to be optimistic about.
Firstly, gold. After two encouraging weeks the spot price fell hard over the weekend, starting the week below $1,200 and falling lower by Wednesday. At that point it started to slowly pick up again, closing the week at $1,294.20. Overall it finished $27.60 lower than the period before but there are signs of support around the $1,180 mark; this should mean we won’t see it fall back to where it was in early November.
Silver also dropped last weekend then made back some ground through the week, closing just under a dollar down at $16.06. Again we can see some support, this time around $16, and analysis of historical trends suggests there could be an upturn on the horizon. Silver tends to track gold closely but right now the gold-silver ratio has diverged significantly. In other words silver has fallen further than it should have based on the performance of gold, and a correction is likely.
Another weekend casualty was platinum, which opened on Monday $25 down from the previous week’s close, then slid again to hit $1,187 by Wednesday. Tracking gold closely it then picked up on Thursday and leveled off, ending the period at $1,196. The price differential between gold and platinum has now basically disappeared, which may stimulate demand in the jewelry market.
Palladium followed the same trajectory as the others, falling over the weekend and continuing down through Wednesday. It then rallied more strongly and by close of trading on Friday was up from a low around $778 to a healthier $$894. That’s $13 down on the previous week, disappointing because of how promising it had looked but not a significant downswing.
And finally rhodium. This has had a very patchy year and is still close to a five-year low, but it’s the only precious metal that didn’t lose ground last week. In fact it stayed flat until Wednesday then suddenly took off, picking up $23 to close at $1,120. It’s the largest rise in the metal since September and coming on top of a period of consolidation looks quite encouraging.
Consolidation, really, is what we’ve seen in the precious metals market last week. Even the prices that fell look to be sitting on some developing support and for silver in particular there’s plenty of grounds for optimism. There’s one more report to go this year, then we’ll see what 2015 brings. Happy holidays.
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. 
