Gold News

Gold gains 1.7% for the week as Dollar sinks to all-time low

From Chris Mullen at GoldSeek.com...

Gold Prices shot to a new 27-year high on Friday, despite a drop in the price of oil as the US Dollar index broke decidedly under 78.0 to a new all-time low.

That took the Gold Market 1.7% higher for the week against the Dollar. Gold Priced in Euros rose back over €521.

Platinum gained $28 for the day to close at $1385, a new all-time high, while palladium gained $2 to $343, and copper rose slightly to about $3.68. Silver ended the week matching gold's gain of 1.7%.

US gold and silver mining equities traded over 2% higher for most of Friday's trade before they fell back off a bit in the last hour of trade, but they still ended with about 1% gains for the day. For the week however, the XAU index dropped 1.6%.

Following this week's economic data showed a sharp drop in US house sales, income growth and consumer confidence, next week will bring pending home sales data on Tuesday, factory orders numbers on Thursday, and consumer credit plus Sept.'s jobs data on Friday.

"After briefly consolidating around $730, some $10 to $15 higher than expected, gold is climbing to new heights," says Julian D.W. Phillips of GoldForecaster.com.

"Why? Because the US Dollar is breaking massive support and falling to new lows.

"Alongside oil prices climbing when many expected a fall we have entered a new era for gold. One where the gold price is driven by macro-economics and currencies. Investment demand is the gold game now as many new funds find their way into gold, probably for the first time. The quarter-end brought book squaring not only in gold but also on mortgage-related investments, for the first time since the crisis began.

"The Gold Market is telling us something is going wrong, horribly wrong, in the monetary world."

Peter Spina, also at GoldForecaster.com adds that: "Gold returned to the center stage Friday, reaching fresh record levels. Gold is returning to its historical attribute as a monetary instrument, and with the US Dollar falling to new lows, capital is looking for a preservation of wealth asset.

"As foreign currencies become more expensive and suspect themselves, gold is quickly becoming an asset choice. A lack of faith in the US Dollar’s ability to preserve purchasing power will continue to flood the gold market with investment demand. This is the key driver.

"I would expect in the coming months the process will continue, in waves, with Gold Prices surpassing the $800 level as investors begin to focus on the $1,000 level."

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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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