Last week was a tumultuous one for silver and gold, and while many thought that it could only get better, the start of this week proved otherwise. Right off the bat gold experienced heavy losses and silver was following a proportionally similar path. Cyprus’ Central Banks selling of a majority of their gold holdings prompted investors to sell off their holdings as well in fear that other Central Banks might follow Cyprus’ path.
US Economy Sputtering
While a declining US economic outlook would make most people think that gold and silver would have good results, nothing could have been further from the truth. Despite increasing unemployment numbers, declining retail sales, and sub-par manufacturing data gold and silver have not been able to get back on their feet after last week’s and early this week’s losses.
A G20 meeting is set to be held and while the US economy declining has not done much in the way of gold’s value, perhaps a meeting of the world’s leading nations will propel silver and gold one way or another.
Early Week Losses
At the end of last week we had thought that Friday’s huge losses would not be replicated anytime soon. No sooner were we eating our words because on Monday the price of gold fell by over $100. It marked one of the worst single day losses in quite some time. This massive decline kind of played on itself because the loss of over $100 in value caused investors to lose trust in the gold and sell their own reserves. This massive sell-off by investors further drove down the price of the yellow metal as well as silver.
For the duration of the rest of the week gold remained stagnant, hovering somewhere around the upper $1,300s. While Friday and Thursday saw metals pick up a little bit of what they lost, it was not near enough to help cover the losses that were experienced earlier in the week.
As far as next week goes, we will look at a number of different things. For one, we will watch the precious metals market directly to see if gold or silver are able to pick up any of the ground they lost. While a declining US economy as well as frustrating economic situations elsewhere around the world, it is hard to imagine that gold will remain as subdued as they are now.
At the beginning of the week gold started at $1,488, when all was said and done, it was at $1,404 . This was a loss of $84. Silver started the week at $25.98 and finished up at $23.28. A loss of $2.70.