Gold rallies – but silver's not so lucky...
Recorded Friday 23 March 2012
Transcript from 23 March by Ben Traynor
Gold broke its recent losing streak on Friday, with the final London Fix price of the week showing a 0.4% weekly gain.
Friday's PM Fix came in at $1664 an ounce, following a surge in US trading that came only 24 hours after gold had touched a 10 week low.
This chart shows the gold price stretching back to the Lehman Brothers collapse in September 2008. Thanks to Friday's rally, the so-called post-Lehmans uptrend appears to be intact, although gold remains below its 200 day moving average.
In contrast with gold, silver failed to avoid a fourth straight weekly loss. Friday's silver fix was $31.54 an ounce, a weekly fall of 2.3%.
Most of India's gold dealers were closed this week. Gold dealers are on strike in protest at the government's decision last week to double the import duties on gold for the second time this year. Investment bank Natixis estimates that by Tuesday the strike had cost $800 million in lost business.
Investor sentiment towards gold continued to be largely negative this week. The Financial Times carried a story which quoted one analyst saying that gold has now become a contrarian trade, while another said investors were now looking to sell the metal short. Friday's rally may therefore have been the result of a classic short squeeze, rather than anything more significant. Next week's trading should tell us more.
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