Weekly Gold & Silver Market Recap – 9/26/2014

Peter LaTona

9/26/2014 4:08:00 PM

Gold and Silver prices continued to be under pressure, but appear set to break a three week losing streak. In September, money managers largely moved away from safe haven trades looking for higher returns. This move has been tempered by continued geopolitical tensions in Ukraine and the Gaza Strip in addition to ISIS terrorists’ threats. The U.S. began bombing suspected ISIS hotspots in Syria, which boosted Gold prices.  On Thursday, a report came out that Russia was considering a measure that would allow them to seize foreign assets. Gold took a sharp turn upward and the U.S. stock market took a 200 point dive.

The U.S. dollar continues to gain on other world currencies and hit a four year high this week, benefiting from downtrodden eurozone economies, Russian economic struggles, new economic policies in Japan not taking hold and a perceived slowdown in the Chinese economy. The U.S. equity markets have also benefited from a strong dollar and a continued trickle of positive economic data. However, one lesson learned in 2007-09 was the interconnectivity of the global economy and many now wonder if the U.S. economy is immune to the effects of the struggling global economies or if it is possible the equity markets are in for a correction.

The Russian central bank added to its Gold position as their economy continues to be under pressure. The Chinese economy is still growing at a pace much of the world envies, but their economy is slowing and they too added to their central bank holdings. China just launched the Shanghai Gold Exchange to compete with the London Bullion Exchange (LBE), which should make transactions more transparent because it will primarily rely on physical delivery and not paper trading. On the LBE, it is rare that actual bullion is traded. The Shanghai Gold Exchange should also provide more transparency as to how much Gold China is buying.  

At 5:10 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,220.40 Down $2.50
• Silver, $17.70 Up $0.22
• Platinum, $1,302.20 Down $15.20
• Palladium, $780.90 Down $21.90

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