Headlines drove the gold price through multiple up and down cycles last week, first from geopolitical concerns in Ukraine and then from U.S. economic data, but the metal ended higher for the fifth straight week after notching a four-month high over $1,350 an ounce. A weaker U.S. dollar has played a key role in the recent strength in precious metals, however, mixed messages from the Fed last week cast doubt on whether that trend will continue.
Gold, and to a lesser extent silver, has attracted a good deal of attention from investors in the West so far in 2014, as steady price gains have resulted in positive chart patterns that have turned some bears into bulls, a change that is confirmed by ETF flows. Meanwhile, in Asia, higher prices have led to less demand, however, that could soon change if India, now the world’s number two gold buyer, relaxes its import curbs.
For the week, the gold price rose 0.9 percent, from $1,328.60 an ounce to $1,340.30, and silver fell 1.6 percent, from $21.23 an ounce to $20.89. The gold price is now up 11.2 percent for the year, still 30 percent below its record high of over $1,920 an ounce in late 2011, and silver is now up 7.5 percent in 2014, almost 60 percent below its all-time high near $50 an ounce three years ago.
As shown in the graphic below from Sharelynx via this item last week at GoldSilverWorlds, this year’s gold market rally has put the gold price on a course to re-enter the long-term ascending channel from which it abruptly departed during the course of last year…
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