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Gold and Silver Market Update (8/31/14) – Golden Eagle

September 2, 2014 0 Comments

The last week was a lot more promising for precious metals, and definitely a huge step forward from the week before. The best news was a turnaround in both gold and silver, in silver’s case ending a six-week negative run. The gains weren’t massive but for both metals it’s looking like they’ve landed on solid support and there are good reasons to expect more improvement soon.
First, the gold price closed $7 up on Monday’s opening price, peaking at $1,288.70 and finishing the week on $1,285.80. We’d expected the price to find support at around $1,275 and the week’s movements seem to confirm that.

Silver prices also gained slightly. It closed at $19.46, and although that was a gain of only 7 cents it reversed a long decline that’s had many silver investors feeling nervous. There’s been a lack of interest in short positions since early July that’s helped drag the price down, but August saw the number of shorts and the quantity of metal behind them more than double, and that’s likely to spur speculators into offloading their short positions and seeking long ones. This should give silver a useful boost back above the $20 point, and hopefully have it heading for $24 by the end of the year.

Platinum followed the same trajectory as gold, dipping slightly on Monday then climbing to finish around $3 up at $1,420. Platinum has tracked gold quite closely for most of the year so we expect to see it rise further next week.

Palladium hit another high at Friday’s close, reaching $903. That’s a whole $20 up on the previous period, signaling continued healthy demand from industry. Again look for this to continue. Palladium has been doing pretty well over the last four weeks and there’s no reason for that to change any time soon.

Rhodium dropped sharply in the previous period but gained some of it back last week to finish at $1,260. Unlike the other precious metals it looks quite sluggish right now but underlying demand is strong and there’s no reason to expect more losses in the near to medium term.

Overall precious metals did quite well last week, and it’s not hard to work out why. After recovering from its dramatic fall a few weeks ago the equities market seems to have got stuck right where it was before the drop, and doesn’t look like it’s going anywhere soon. That’s always the sort of news that nudges people back towards safer options like metals, and it’s a reasonable assumption that that’s what we’re seeing now. There are some developments that could help keep stocks where they are now or even force a downturn; for example the UK’s recovery may be weakening as manufacturing output slows, and that’s likely to be a symptom of a Europe-wide issue.

It’s been a bumpy ride for precious metals the last few weeks and no doubt there are some more surprises in store, but in general it’s looking like prices are going to rise from current levels. That means it’s a good time to buy, because gold, silver and the rest might not be this cheap again.

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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