Gold and Silver Market Update (7/12/14) – Golden Eagle
It’s been a fairly good week for both the main precious metals, with gold and silver both up around 1.5 per cent on the last period. In fact the spot price graphs for the pair look almost identical, with a slight dip after trading opened on Monday, a rally on Tuesday and a steady climb to Thursday’s peak, then another small dip back to the final price. The graphs track each other so closely it’s obvious the same factors were driving both. So what factors could those be?
The continuing turmoil in major exporters Russia and Iraq has driven the price of oil up over the last few weeks, reducing the attractiveness of metals. There was little movement in the crude price this week, though, with the standard OPEC barrel starting and finishing the period within a few cents of $108. If it sticks there or starts to come down money will move out of oil and into other commodities, with metals being likely beneficiaries.
US stocks and shares continue to perform surprisingly well and that’s helping to keep metals down. It’s likely that trend will continue as long as more positive news comes in about the US economy. Thanks to better than expected unemployment figures from June analysts are feeling more optimistic about the American economy.
The picture’s not quite as bright in Europe though. Portugal’s second largest bank is looking rocky and the government may not be in a position to keep it afloat if its debts turn bad. That sort of uncertainty is bound to have an effect right across the Portuguese economy and possibly in other Mediterranean countries too. One part of that effect could be an upward pressure on the gold price and silver prices.
Some analysts think silver could be on the point of dropping back, perhaps as low as $17.50, before starting a long climb to $25 or even higher. That’s based on a lot of short selling that’s been going on, and the same applies to gold (although to a much smaller extent). Long term things look good for both metals, though. The World Gold Council just predicted that China’s annual gold demand will rise from 1,100 MT now to 1,350 MT by 2017. That sort of increase is definitely going to push prices up because supply can’t adjust far enough or fast enough to take up the slack.
As far as other metals go, palladium had another good week with the spot price now past $870 and showing no sign of stopping yet. Platinum had a positive start to the week but leveled off on Thursday, closing the period at $1,512. Palladium seems to be the strongest performer this year so far, largely driven by demand in the auto industry. As that continues to increase companies are going to put more energy into recovering scrap palladium, so the trend could well taper off, but for now it’s looking good. Gold and silver will pay off in the long run but if you want something that will pay off now then palladium might be exactly what you’re after.
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. 
