Gold and Silver Market Update (9/14/14) – Golden Eagle
This has been a very bad week for precious metals, with all of the main ones seeing nothing but downward movement right through the period. In every case except palladium and rhodium we’re seeing at least a three-month low, and for gold and platinum the spot price is its lowest in more than six months. It’s been a while since we’ve seen a period that’s been so bad all across the board, and obviously times like this make for nervousness among metal investors.
First, gold. The spot price dropped more than $40 during the week to close at just $1,228.30. That’s the lowest it’s been since the first week in January and the fall through the period was almost unbroken, with just a tiny, short-lived upswing on Wednesday. Up to now we’ve usually seen a small recovery just before the markets closed on Friday afternoon but that didn’t happen. The support we hoped to see forming at $1,250 never materialized, so the best hope now is for a new floor to build at $1,200, with gold hopefully recovering from there.
Silver also had a terrible week, losing 59 cents overall to finish at $18.61. Again there was practically no variation in its slide, with the price dropping consistently day on day. Support at $18.50? It’s possible but after the time silver’s had since late July we’re not betting on it. $18.25 or even $18 seems more realistic.
Platinum has been tracking gold closely and that hasn’t changed. The price fell $36 to end up at $1,363 and again the drop was steady all week. Without a reversal soon we could see platinum drop below the $1,300 mark for the first time in a year.
There looks to be a readjustment going on for palladium, which ended August at a five-year high. It dropped hard in the previous period and fell even more sharply last week, closing $54 down at $831. There’s a slight touch of hope here though, because industrial demand for palladium remains strong and the price took a slight upward bounce on Friday. The next week should be interesting here.
Rhodium began the week like everything else, falling, but seemed to level off on Tuesday. That didn’t last though and it ended up taking the biggest losses of all, $70 down at $1,190. This seems like too much even by the week’s standards so we expect to see it perform better in the next period.
The main reason for this dismal performance is probably the strength of the US dollar, which is doing very well right now against all the other major currencies. Both the Euro and the Yen are faltering as their central banks contemplate quantitative easing to perk up sluggish economies, and that makes the dollar attractive. However as inflation kicks in throughout Japan and the Eurozone – an almost inevitable result of the policies they’re leaning towards – that should leave metals ideally placed to act as a hedge against weakening currencies. If you’re thinking of offloading your metal holdings it might be worth waiting until that happens, because they could all be rising steeply again by the end of the year.
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. 
