24/11/2023: This Week in Gold with Market Updates
Price Action:
Gold:
Price opened the week at $1,981/oz after rising 2.17% during the previous week of trading.
On Monday, gold moved slightly lower for the day, dipping 0.15% to close the day at $1,978. The Dollar index (DXY) fell 0.5% while Treasury yields increased. The fall in the dollar limited the effect that rising yields would typically have on gold and losses were kept at bay.
Price increased steadily throughout the day on Tuesday before breaking the $2,000 level around midday. Price went as high as $2,008 before levelling off and reversing course. Gold moved higher as investors expect the FED’s rate hiking cycle to be over. FED officials indicated that the Central Bank would only increase rates if information indicated that inflation was not moderating. As well as this, the dollar hit a 2 and a half month low which makes gold more affordable for foreign currency holders. This helped gold in the rally past $2,000 an ounce. Price cooled off toward the end of the trading day and closed at $1,999, a 1.05% gain for the day.
Gold price consolidated within a narrow range during the first few trading hours on Wednesday before bouncing off the $2,000 level. Price moved 0.59% to the downside towards the end of the day to close just over $10/oz under the key $2,000 level it reached earlier in the day. The DXY moved higher which limited gold purchases.
After closing the day with a gradual decline on Wednesday, gold price had a promising start on Thursday. Opening at $1,990, gold moved higher, nearly hitting the $2,000 level during trading multiple times before consolidating for the remainder of the day. The DXY moved lower but trading was limited with the U.S. celebrating Thanksgiving and investors uncertain with the FED’s next course of action regarding interest rates. Price finished 0.2% for the day.
On Friday, price consolidated within a $3 range for much of the early trading hours. At the time of writing, gold is trading at $1,996/oz, which puts it up 0.75% for the week.
Silver:
Silver opened the week trading at $23.72. After a 6.2% weekly gain last week, price seemed to moderate and trade within a more narrow range this week.
On Monday, price moved 1.2% lower, following the trend of gold while Treasury yields rose.
With a weakening dollar on Tuesday, and an anticipation of FED interest rate cuts, silver rose throughout the day. Price reverted Monday’s move down and climbed 1.3% to close the day at $23.75 an ounce.
Silver’s open and close was within a $0.16/oz range on Wednesday, with price edging lower.
On Thursday, silver consolidated for much of the day and ultimately finished $0.06/oz higher at $23.7.
At the time of writing, silver is following the trend that it was on both Thursday and Friday, which is one of consolidation. Silver is currently trading at $23.87/oz, which is a 0.5% gain for the week.
Market Updates:
There was little news affecting gold and silver this week in financial markets.
The Federal Open Market Committee (FOMC) meeting minutes, which is a detailed record of the committee’s most recent policy-setting meeting, were released on Tuesday. This news was expected to have an effect on gold and silver markets and ultimately moved prices 1.05% and 1.3% higher, respectively.
At the most recent meeting, the FED expressed little motivation for cutting rates soon.
However, the committee agreed that they would proceed with caution, and only raise rates again if their progress in moderating and controlling inflation faltered. This was welcome news for gold and silver, due to the inverse relationship that is present between interest rates and the two precious metals.
