Gold News

Gold & Silver Prices Spike Then Slip, ETF Data "Invaluable" as Ukraine Hits Headlines Again

GOLD and SILVER prices both fell from overnight jumps lunchtime Tuesday in London, edging back as Asian equities ended the day higher and Europe held flat despite fresh sabre-rattling between the US, Europe and Russia over the Crimea region of Ukraine.
 
Gold and silver edged down to $1348 and $21.12 per ounce respectively having earlier touched $1352 and $21.30.
 
Tuesday's peak saw gold add 1.5% from Monday's low, while silver spiked 2.0%.
 
"Gold and silver strong despite overnight selling from Far East," says a note from Standard Bank's commodities team.
 
"With investors buying into silver ETFs again," adds the latest monthly report from London market-maker Scotia Mocatta's New York desk, "and with gold leading on the upside, we feel there is good potential for silver prices to rally.
 
"Especially considering how far prices have corrected in recent years."
 
Silver bullion held to back the value of shares in exchange-traded trust funds ended Monday unchanged from a week before according to analysts at Swiss bank UBS.
 
Weighing some 19,300 tonnes, silver ETF holdings have risen by 1.5% so far in 2014 as investor demand grows.
 
Bullion held to back gold ETF shares last week swelled by nearly 1%, led by the giant SPDR Trust (ticker: GLD), but remained just below the 1,858-tonne starting level of 2014.
 
Gold ETFs last year liquidated some 880 tonnes of bullion.
 
"ETF flows are a very important dynamic in the precious metals market," says a fundamental analysis of "important commodity factors to watch" from French investment and bullion bank Societe Generale.
 
"Commodity markets are rapidly returning to the radar screen of market participants," SocGen explains. "While our long medium to long-term outlook for both gold and silver are both bearish, the positive sentiment associated with ETF flows...will provide invaluable information into short-term price dynamics."
 
Looking at gold's current trading range, "The key support level on the downside is $1330," reckons technical analysis from ANZ Bank, "which the market tested twice [on Monday].
 
"On the flipside, the market has built sold resistance at $1350 per ounce in the last week."
 
Spiking 2.5% today to a three-session high of $21.30 per ounce, silver last week "[gave] up the $21 level for the first time in 3 weeks," notes Japanese conglomerate Mitsubishi's precious metals note. 
 
"Another close below the 200-day moving average would be a bearish development for silver by itself," the analysis adds, pointing to "the $20.85 support level, the 61.8% retracement of the June to August price rise."
 
Prices on the Shanghai Gold Exchange rose overnight Tuesday, reducing local gold discounts compared with London settlement to $2.40 per ounce from Friday and Monday's 23-month records of $3.20.

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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