Gold News

Gold Bounces But Closes the Week 2.8% Lower as G-8 Meeting Buoys Dollar; Silver Drops 5.1%

From Chris Mullen at

Gold Prices gave back an overnight Asian rally to $874 in London on Friday, falling to $859 per ounce before bouncing in New York trade to close unchanged.

For the week, Gold lost 2.8%. Silver dropped 5.1%. The HUI gold bugs index of Gold Miner stocks fell 7.7%.

Oil fell on speculation Friday that Saudi Arabia may boost production, while the Dollar rose and Treasuries fell on US Consumer Price Inflation numbers that increased inflation fears and furthered the case for the Fed to raise interest rates sooner than previously thought.

But I’ll believe it when I see it.

“The silver and Gold Price are weakening in the face of a slightly stronger Dollar, now standing at $1.5318 to the Euro – the top side of the trading range it has been in for some weeks now,” notes Julian D.W. Phillips at

“Will the Dollar break upwards? The Administration is placing huge pressure on all relevant people to make it rise, but the fundamentals don't support such a rise. Secretary Paulson is behind the bulk of the pressure, so the market is looking expectantly to the G-8 meeting this weekend.

“If the support for the Dollar were visible and fundamental, the Dollar would rise. But until then, the future of the Dollar remains in question. Gold and silver, now in their quiet season, are sitting on support now and strong support at that.

Gold Investment Demand is sitting on the sidelines waiting for good reasons to buy, which are there, but they fear a change in the Dollar right now.”

Back in Friday's action, the Dow, Nasdaq, and S&P rose over 1% on lower oil prices and apparent confidence that the economy can hold up to higher interest rates.

The Gold Price in Euros rose near €565, platinum gained $13 to $2028.50, and copper gained over 6 cents to about $3.59.

Next week’s economic highlights include the NY Empire State Index and Net Foreign Purchases on Monday, Building Permits, Housing Starts, PPI, Capacity Utilization, and Industrial Production on Tuesday, and Initial Jobless Claims, Leading Economic Indicators, and the Philadelphia Fed survey on Thursday.

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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