Market Updates

Precious metal investors received a rude shock this week with gold, which looked like it was finally ready to re-exert itself, but falling roughly USD $50oz in two trading days.

The precious metal market has enjoyed another steady few days, consolidating gains above the USD $1300oz level for gold, whilst silver is just above the USD $21oz level for now, last trading at USD $21.10oz

It has been relatively uneventful week, with no major developments on the geopolitical front, nor any ‘market moving’ economic news, though there’s been some volatility in equity markets these past few days.

Indeed all eyes seemed to be waiting on the overnight release of the latest Federal Reserve Minutes, though even this has no major surprises, with QE likely to be tapered according to previous guidance.

Whether it’s a golden wedding anniversary we’ve attended, cheering on an Australian to a gold medal performance at the Olympics, or describing a friend or loved one as having a ‘heart of gold’, Gold is a word that we all instinctively recognize and associate with something of merit or value.

And whilst many of us own some gold jewellery, as a pure investment asset, gold is a little harder to understand.

On the downside, it pays no yield, its volatile (like shares) and its impossible to value by any traditional valuation metrics, as it’s not like a business which has sales figures or profit margins you can analyze.

Gold prices have traded in a relatively narrow range again this week, oscillating between roughly USD $1315oz and USD $1335oz, as the market awaits a compelling impetus to push it higher.

ADP employment figures released in the US overnight, which saw 281,000 jobs created acted as a headwind to prices, which traded down toward USD $1320oz upon the release, but in a sign that the market is now in stronger hands, this weakness was short lived, and gold bounced back to roughly USD $1327oz, where it sits today.

Silver has also been steady, trading either side of USD $21oz, as it has for much of the past two weeks, and currently sits at USD $21.18

For Australian dollar investors, the relative strength in the AUD, which was nudging the USD $0.95 cents level at one point this week, and which still sits at USD $0.9436 has helped constrain prices, though we’re now above AUD $1400 and AUD $22.50 for gold and silver respectively.

The precious metal market has consolidated last weeks gains in the past few days, mostly trading in a range between USD $1310oz and USD $1330oz. Silver has also stabilised, trading in a relatively narrow range either side of USD $21oz

Up about 9% for the year, the rebound in gold prices has been pleasing for all, though local investors have been held back a bit with the largely unexpected rally in the AUD.

Whilst the recent strength in the sector has been pleasing, and momentum is with the bulls right now, it bears repeating that it’s still too early to say that we’ve turned a decisive corner, and that “the bottom” is in.

Yesterday (the 18th June 2014), my friend Greg Mckenna, who blogs daily for Business Insider on all things markets and economics, wrote an excellent piece on gold, titled: “TRADING INSIDER: Here’s why Gold Polarises Traders and Divides the Market”.

Gold prices have enjoyed a steady week, up just over $10oz from last Friday’s London PM Fix, and currently sitting at USD $1261oz. Silver is also up marginally, sitting at USD $19.23oz. It’s been a relatively uneventful week for the precious metal complex, and indeed for global economic data, after last weeks ECB interest rate decision, and US Non farm payroll report.

After a bearish break down last week, gold prices have stabilised over the past few days, as the financial and investing world looks to the European Central Bank (ECB) and its president, ‘Super’ Mario Draghi.

The gold bears finally won the battle. After weeks of trading in an increasingly narrow range, gold finally broke down earlier this week, dropping through support in the USD $1280 range and falling all the way to USD $1258oz where the metal currently trades.

Another relatively uneventful week for precious metal prices so far, with both gold and silver still trading in relatively narrow ranges. Using the London PM Fix as our guide, USD gold has averaged USD $1293.60oz for the month of May, with the high/low range for the period coming in at USD $1306.25oz and USD $1278.50oz, respectively.

Precious metal prices have been relatively uninspiring the past few weeks. Whilst there has been some intra day volatility, the PM fix for gold has been stuck in a less than $50 range, trading between USD $1278oz and USD $1325oz.

Gold prices eased substantially overnight, as a reported pullback of Russian forces in the Ukraine dented the yellow metals safe haven demand.

It’s a huge week of economic data. Not only did we have US GDP figures overnight (they were horrible – more on that below), but we’ve had the latest FOMC meeting, and non-farm payrolls are due later this week in the USA too.

With the first three months of 2014 complete, this quarterly directions report will take a look at how the year has unfolded so far, with a look at market returns, as well as where gold might head in the short term.

Gold prices and the precious metal complex have enjoyed a solid week, with the price of the yellow metal rallying just over USD $20 per ounce so far, as a combination of dovish Fed minutes, volatility on stock markets and the potential for the situation in Ukraine to escalate, have all seen the metals bid.

Despite the bearish sentiment towards the precious metal complex after the sharp decline from USD $1390 per ounce, gold prices have held up relatively well this week, as the market looks toward the all important US non farm payrolls report due out tonight, Sydney time.

Gold prices briefly broke below USD $1300 per ounce overnight, as headline data beats in the US added to the downside pressures that have come to bear on the yellow metal in the past several trading days.

Please find attached slide-deck presented at the Future Wealth Forum in Perth, on the 22nd and 23rd March 2014. The event was a great success, and capped off a fantastic week for ABC Bullion, where we officially launched our Perth office. Focusing on the unresolved challenges of the GFC and potential investing solutions for these times, this presentation posed the question, "Is this time really different", and analysed the outlook for term deposits, equities, bonds and gold in the period ahead.

This link contains slides that ABC Bullion Chief Economist Jordan Eliseo, Ronald Stoeferle of Incrementum AG and Jan Skoyles of The Real Asset Company discussed in their Global Precious Metal Roundtable on 14th March 2014

Gold prices moved sharply higher overnight, at one point testing USD $1370 per ounce, as escalating tensions in the Crimea and some short covering, saw the entire precious metal complex rally.