The remarkable move upwards of gold prices in mid-June has gold investors catching their collective breath and walking with a little more spring in their step, as June draws to an end and gold prices firm up well north of US$1,300 per oz.
Spot gold prices had been on a slow march downwards since March — dragging sentiment along with it — and had touched a six-month low of US$1,242.75 as recently as in the first week of June.
Prices strengthened over the next two weeks until the big trading days on June 19 and 20, when spot gold shot up US$42.75 over two days to US$1,312.50 per oz. — breaking and then holding well above the US$1,300 per oz. level.
While silver prices didn’t move upwards as dramatically, it was satisfying for silver bugs to see the metal move in sympathy with gold, and trading above US$20 per oz. once again, after dropping below that level in early April.
At press time, spot gold and silver prices had levelled out at an agreeable US$1,320 and US$21 per oz.
(In contrast, platinum and palladium prices were subdued over the same period, as new supply is likely to hits the markets in the wake of a tentative agreement to end the five-month-old strikes in South Africa platinum mines.)
Perhaps equally as impressive, gold’s gains were made as the U.S. dollar strengthened and U.S. stock markets once again hit record highs.
Most observers pin gold’s big move to two gloomy developments: the rapid success of the armed Sunni militant group Islamic State in Iraq and Syria (ISIS) in seizing much of Iraq’s northwest, including major oilfields and refining capacity; and surprisingly dovish comments from the Bank of England signalling that the U.K.’s first interest rate increase since 2009 may be put off for quite some time, as subdued wage growth mirrored spare capacity in the economy that should be used up before monetary policy is tightened.
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