It's been a volatile week for the yellow metal in quiet trading as global data and economic news have caused prices to pull in various directions.
Dealing Manager at GoldMoney, the online precious metals trader, Kelly-Ann Kearsey said, 'The week started with weaker than expected Chinese factory data pushing oil prices down further, forcing Brent Crude to below $60 a barrel. This had the effect of decreasing gold prices as deflationary, rather than inflationary pressures took the helm.
Markets were waiting for news from the US Federal Reserve bank to see when they might raise interest rates. The dovish stance that was announced supported gold and hit the dollar, but that was a short-lived reprieve as the US Consumer Confidence data gave further support to the American economy and gold once more headed south.
However, while the US economy still appears to be going in the right direction, others aren't. The Russian Government's intervention to support the Ruble, raising interest rates to 17%, has encouraged some safe haven buying, but generally GoldMoney customers have been selling the yellow metal in seasonally quiet trading.
The focus of GoldMoney buyers has been on the white metals, we've seen the usual trend of selling out of the UK and Switzerland, but the buying of silver has been heading into our Singapore vaults along with increased interest in platinum and palladium.
With the gold/silver ratio standing at 74, silver is definitely looking like a good option and our customers are taking advantage with some bargain buying.
We aren't expecting a lot of customer activity from now until year end, although the quadruple witching* on Friday will likely add some further volatility to an unpredictable gold market.
It's interesting to note that this time last year gold prices weren't far off what they are now, our last market report before Christmas recorded gold at $1202.81, just above its support level and around the numbers we've been seeing this week. However silver is down on last year's $19.41 which is why we're seeing interest from our customers in what looks to be a well-priced opportunity.
With little activity expected from our customers during the seasonal holiday our market report will return on January 8th. In the meantime, we wish you all a happy Christmas and prosperous New Year.'
*An event that occurs when the contracts for stock index futures, stock index options and stock options and single stock futures all expire on the same day.
Week on Week performance: 18/12/14 16:00. Gold fell 2.2% to $1,195.01, Silver dropped 6.6% to $15.93, Platinum slipped 3.4% to $1,196.95 and Palladium decreased 3.5% to $789.40.
NOTES TO EDITOR
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