Gold & Silver News – Dec 1st 2014

Gold and silver futures saw a third straight week of gains this week, rising to three-week highs after China cut its benchmark interest rates to stimulate its economic growth, which helped boosted demand for the yellow metal.

Price and Charts Snapshot:

Weekly Gold and Silver Graphs

On Tuesday, gold prices hit a three-week high in early US trading which prices pushing above USD$1,200.00. A weaker US dollar index and news that India’s gold exports are increasing provided support to the precious metal^[1]. Gold prices were trading moderately lower Wednesday and Thursday afternoons, with a poll in the Swiss Gold Referendum indicating only 38% in favour of increasing gold reserves, and also weak EU economic data showing EU construction spending declined 1.8% in September. However on Friday, Gold futures prices rebounded, ending moderately higher, boosted by a surprise interest rate cut in China and by dovish comments from the European Central Bank.

For the week the yellow metal rose by 1%; while in 2014 overall gold has dropped 0.4%^[2]. Meanwhile Silver futures for March ended the week up by 0.5%.

Following the recent upward trend, a majority of survey participants in the weekly Kitco News Gold Survey see higher prices coming next week. Out of 23 respondents, 14 see prices increasing, while six see prices going down and the remaining three see prices staying sideways or unchanged^[3].

After hitting a four-year low on November 7, gold has climbed as signs emerge that nations are boosting their reserves. The World Gold Council estimates that central banks may raise purchases by up to 22% for 2014. However those who see low prices include Dan Pavilonis, senior commodities broker at RJO Futures, who said “With the Fed out (no longer conducting quantitative easing) that will cause interest rates to float higher. It’s not a good scenario for gold”.

According to Forbes (via Kitco), for Gold the first resistance is seen at the week’s high of USD$1,204.70 (AUD$1389.46) and then next at USD$1,210.00 (AUD$1395.57). While first support level is the overnight low of USD$1,186.70 (AUD$1368.70) and then at USD $1,180.00 (AUD$1360.97). For Silver, the first resistance is this week’s high of USD$16.575 (AUD$19.12) and then next at USD$16.715 (AUD$16.715). The support target is set to the overnight low of USD$16.16 (AUD$18.64) and then at USD$16.00 (AUD$18.45).

There will be much to consider next week due to important events including a major meeting of the Organization of Petroleum Exporting Countries (OPEC), inflation data out of the eurozone, and also may experience some last-minute positioning ahead of the Swiss Gold Referendum coming on November 30. Gold will also start out the week watching Monday’s December contract options expiration^[4].

Author Lisa Casagrande | https://www.goldbullionaustralia.com.au