Weekly Gold Review: http://www.hx9999.com/en/comment_week_593.html
Gold trended upward in the last trading week. The range stepped up daily from the weekly lowest 1,353.70 USD on Monday and hit the weekly high 1,392 USD on Friday. The difference exceeded 38 USD. With the close at 1,389.90 USD on Friday, gold had almost appreciated for 34 USD within the week.
Gold rose modestly everyday last weekely. The daily ranges were merely around 10 USD while the largest was 16 USD on Tuesday. Such uncommon pattern might count for two conditions: market was positive mainly because of the unrest in the Middle East thus gold had closed in green for the whole week; yet investors were still hestitate to buy in bulk and limited the upside strength of the yellow metal.
The situation of Egypt seemed to be clam down at the moment. However the strikes had spread to other Middle East countries and brought more serious conflicts. The chaos pushed some short-term funds into the gold market. While the political unrest among the Middle East and African countries might not be settled within 2 or 3 months, it is expected that gold would keep absorbing those hedging funds.
The price of silver was another fovorable factor to gold. Silver climbs everyday as gold last week while some ranges of silver was much larger. Say on Thursday silver rose to the high of 31.8 USD from the low of 30. 50 USD, more than 4.2%; again on Friday it rose from 31.60 USD to 32.90 USD, more than 4%, hit the 32-year record high as well. The potential of silver provided support to the rebound of gold.
Some investors expected that the the change in fund liquidity might have negative effect on gold, leading to some short orders last week. The People’s Bank of China announced to raise the reserve ratio of banks again could reduce funds from the country. There was also noises among the carrying out of the QE3 in the U.S. The cost and liquidity factors might account for the less buy orders compared with last year.
Technically gold is likely to hit the levelof 1,400 USD again. This would bring the preivous downside trend to an end, and support the gold to test the 1,430 USD level. The weekly range was expected tobe between 1,360 USD to 1420 USD. It is very likely to reach 1,400 USD but investors should notice whether the dollar would change the current status.
Supported by both investment and real buying orders, technically silver is also heading upward. Yet at the 32-year high level, there should be constraints on the trend. At the moment the target should be placed at the vital psychological level 35 USD.
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