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  • Strengthening Dollar Pushes Gold, Silver Spot Down 0 comments
    Oct 23, 2012 4:23 AM

    The strengthening of the US dollar combined with a push for greater liquidity in the US market led to the slide of the gold and silver spot for the second week in a row. Meanwhile, easing tensions in the labor situation of South African mines has fueled supply stability for platinum and palladium.

    (click to enlarge)

    Dollar gains; silver, gold falls1

    For the second week in a row, the gold, silver, platinum and palladium spot fell as the US dollar bounced back versus other currencies. Continued uncertainty in the European market, likewise, drove investors to prioritize liquidity creating a sell-off in many financial segments. Weaker-than-expected earnings from many notable Wall Street performers like Google and Microsoft also helped push precious metals lower particularly during the last hours of Friday trading.

    Gold plunged 1.45 percent for the week while silver suffered heavier losses when it fell 3.69 percent down to the $32 per troy ounce level.

    Platinum and palladium also dropped 1.58 percent and 2.19 percent respectively. The dramatic slide in precious metals over the last two weeks has pushed precious metal prices down to their lowest level in nearly six weeks.

    Precious metal ETFs respond to the spot, slide

    Gold ETFs fared much better versus the spot price. Several gold ETFs only dropped by less than a percent point in last week's trading.

    SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) fell 0.82 percent and 0.83 percent respectively, also recording identical 30-day losses of 2.90 percent each. Meanwhile, Market Vectors Gold Miners ETF (GDX) was the lone bright spot. GDX advanced nearly 0.17 percent for the week, buoyed by strong performance in Tuesday and Wednesday trading sessions.

    ProShares Ultra Silver (AGQ) led all silver ETF losers posting a 6.46 percent loss in weekly trading dragging its monthly trend 14.36 percent lower. AGQ closed the week under the $50 price level for the first time since late August. iShares Silver Trust (SLV) was also in the red this week as it tumbled 3.18 percent.

    Rounding up our check of the precious metals ETF market are ETFS Physical Platinum Shares (PPLT) and ETFS Physical Palladium Shares (PALL) which also fell modestly. PPLT dropped back 1.27 percent while PALL tumbled to a 1.93 percent close.

    Market perception for gold, silver shifts to "Sell" 3

    COMEX contracts settled lower Friday, amid lower spot prices across the board. This has changed market perception to "Sell" for gold, silver, and palladium, the first time since March. The trend also shows significant volatility in silver which has suffered losses for two consecutive weeks.

    (click to enlarge)

    Gold equities rally; Barrick Gold receives favorable ratings from Jefferies2

    The precious metals equities market posted mixed results last week. For gold equities, Barrick Gold (ABX) and Kinross Gold (KGC) posted modest positive growth of 0.23 percent and 0.10 percent respectively. Barrick Gold had a particularly strong week after Jefferies, a global investment bank, upgraded its assessment of ABX stocks to "buy" following expected strong gold production forecasts in the coming months. Meanwhile, Goldcorp Inc (GG) and Rangold Resources Limited (GOLD) fell 0.02 percent and 1.55 percent respectively.

    Silver Wheaton's SLW continues to fluctuate around the $40 price mark after it breached this level for the first time in 12 months two weeks ago. This week, SLW momentarily broke through the $40 ceiling in Wednesday's trading before falling back to close 1.50 percent lower for the week.

    Anglo-American Platinum Limited (AGPPY) and Anglo-American PLC (AUKKY) both stayed strong for two weeks in a row. AGPPY closed the week up 1.87 percent while AUKKY rallied to a 4.96 percent gain. Labor protests in South Africa continue to be a major problem affecting the supply side. However, progress was reported during in-company labor negotiations resulting in segment-wide optimism that supplies will remain up to support heavy global demand expected in November and December this year.

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