Gold and Silver Market Update (8/23/14) – Golden Eagle
Last week wasn’t a good one for precious metals, with the partial exception of palladium; we saw prices drop almost across the board, sometimes sharply. Gold in particular is now hovering close to its anticipated support level and we’re just waiting to see if it will dip lower or start to bounce back.
The main reason for a move away from metals was without a doubt the impressive recovery in major equities. A couple of weeks ago it looked as if the Dow Jones Index’s steady climb had gone into reverse, with the entire year’s gains wiped out in a 500-plus point fall over a few days. Since then it’s clawed back almost everything it lost and the temporary loss of confidence in equities seems to be fading, and the swing towards a safe haven that gave the gold price a temporary boost looks to be fading with it.
The biggest shakeup was definitely the gold price, which looked like it could be set for a climb at the end of the previous period. Instead it reacted to the stock market climb by dropping sharply, finishing at $1,280.61 – a loss of nearly $24. With support probably close to $1,275 that’s going to make the next week an interesting one. A further fall that size could see long-term damage to the spot price and might indicate a sell-off.
Silver has been falling steadily for weeks and that continued, with the price closing at $19.39 on Friday. That’s a 16 cent loss, under half the previous week’s drop, so silver could be approaching a floor at around $19.25. If the support holds at that level we could see a turnaround in a metal that even in the current climate is looking undervalued, so right now silver is worth holding on to.
Platinum also dropped throughout the week, hitting a low of $1,414 on Thursday and recovering slightly to $1,416 by the time the markets closed on Friday. A fall of $36 in a week suggests platinum could be heading somewhere close to last December’s low unless equities take a serious hit.
Rhodium is also down, from $1,380 on Monday morning to $1,330 by Friday afternoon. This is probably more of a correction after recent rises than a sign of weakness in the market; demand is still strong and there’s no sign of it tailing off any time soon, so we don’t expect to see a serious fall here.
We’ve left palladium for last because it showed the strongest performance over the period. The price did fall from its five-year high at $890, hitting the $865 mark on Wednesday, but recovered over the rest of the week to close at $883. That’s nowhere near enough of a drop to cause us any worries right now; again industrial demand is strong, and known reserves are limited.
Overall it was a disappointing week for metals investors but there are definitely plenty of good reasons to hang on. With the economic recovery still shaky there’s a good chance we’ll see the market turn upwards soon, and in the meantime gold and silver should both be finding some support not far from where they are now.
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. 
