Gold Falls to Lows as Focus turns to Equities
Gold closed the week at a multi week low of $1659.30, down more than 3% on the week..
Economic news throughout the week was generally good in the United States, meaning that investor focus has once more turned to equities. Indeed, America’s major equity indices rose by around 2.5%, recording three and four year highs, with the Nasdaq recovering to levels not seen since the fourth quarter of 2000.
Though industrial output was flat in February, retail sales once more picked up. There are inflationary pressures building, though the Fed believes that these will be short lived. It has said that it continues to see short term interest rates kept on hold until 2014. In response to rising oil prices, the US and Britain have agreed to release some of their strategic reserves in order to increase supply and dampen price pressure.
In further good economic news the US four-weekly jobless claims number remained stable, though a widening trade deficit and a fall in the Michigan Consumer confidence index failed to take the shine off equity markets.
Though there are concerns that Greece will find its austerity measures increasingly difficult to keep, the EU and IMF gave final agreement to the bailout package which means its debt commitments can be met this coming week.
China’s trade balance numbers confirmed its weakening forecast for its economy going forward. A deficit of $31 billion was a large turnaround for January’s $27 billion surplus, and has been attributed to weakening demand for its goods from abroad. At home, the Chinese are seeing a slowing of demand for cars and retail goods as the vagaries of a more capitalist economy start to hit home.
Adding to the gloom surrounding precious metals – silver dropped by around 6% on the week – the Indian authorities have announced that they will be doubling the duty on gold imports from 2% to 4%. This is the second such increase this year, and is expected to reduce demand for gold from one of the largest gold importers in the world. It is estimated that demand could fall by as much as 30% this year.
The eyes of gold investors will be turned to watch if the price of gold can remain above technical support at around current levels through the next few days.
- Gold News: Weekly Market Update Week Ending 2nd March 2012
- GOLD NEWS: Weekly Market Review, Week Ending 9th March 2012
- Gold News: Weekly Market Update for Week Ending 16th December 2012
- Gold News: Weekly Market Update, Week Ending 17th February 2012
- GOLD NEWS: WEEKLY MARKET UPDATE, WEEK ENDING 6TH JANUARY 2012
- GOLD NEWS: Weekly Update – Market Review Week Ending 13th January 2012
- GOLD NEWS: Weekly Market Update for the week ending 20th January 2012
- Gold News: Weekly Market Update, Week Ending 10th February 2012
- Gold News – Weekly Market Update Week Ending 9th December 2012
- GOLD NEWS: WEEKLY MARKET UPDATE, WEEK ENDING 27TH JANUARY 2012