A week that looked like it was going to be a relative non-factor for both gold and silver quickly turned into a nightmare that very few people anticipated. The fact that the Chinese were off all week celebrating their New Year did little to help precious metals’ fortunes as demand was highly diminished.
Since the Chinese were off all week many precious metals experts and investors geared up for a quiet week but right off the bat they were proven wrong. Monday saw gold and silver drop by significant margins, and this more or less set the tone for the duration of the week.
Having little news to spur positive gains, precious metals slowly but surely declined in value. Many awaited the G20 meeting which was set to take place at the end of the, in hopes that news stemming from this meeting could help right the path of precious metals.
G20 Does Little to Help
Thanks to gold’s drop off at the beginning of the week, people clung to the thought that the G20 meeting might be able to slow the decline. What was found out was quite the opposite because news stemming from the meeting did little to help metals and a lot to hurt them.
The news was that nations were being urged to stop devaluing their currencies in such a competitive manner. As we all know, whenever there is uncertainty about a given currency or set of currencies, this usually bodes well for metals. Now that people are under the impression that currency devaluation will slow down, they are looking at things like the euro and USD as more viable investment options as opposed to storing their wealth in precious metals.
As we wrap this week up and look ahead to next week one can only hope that metals rebound in some sort of fashion. This seems unlikely however, because positive economic data out of the US means bad news for gold and silver. While an improving economy may be good for unemployment levels and wage rates, it is devastating to investors.
From the beginning of the week to the end, gold dropped from a $1,668 opening price on Monday, to an astonishingly low closing price of $1,609 on Friday. Silver did not fare much better as it dropped from $31.48 to $29.83, a drop of more than a dollar and a half.
This market update is provided weekly with analysis. You can always check prices by watching our up-to-date gold and silver price chart.