PR: Gold and silver surge higher as sentiment improves
Gold surged higher as the political uncertainty in Egypt and mixed economic data coming out of the US rebooted investors interest in the metal.
Spot gold was US$2.17 higher at US$1,368.09, its highest level for two months as the US dollar weakened against both the euro and yen. Gold tends to move in the oposite direction to the US currency.
Late Thursday, the price jumped US$40 to US$1,372 before easing back. Traders said unwinding of short positions as the price appreciated had added to the sharp spike,
Gold is now heading for a gain of about 4% over the week despite data from the US that pointed towards tapering of its monetary stimulus policies starting sooner rather than later.
Good US dole claimants numbers on Thursday coupled with low inflation could see tapering start with the Fed's next policy meeting is on 17-18 September. Jobs are one of the Fed’s key criteria and the initial jobless number is now at levels seen before the latest recession.
Traders forecast gains towards for gold despite these encouraging signs for the US economy, especially as latest quarterly filings indicated that heavy sales of ETFs by funds such as John Paulson’s gold fund were heavily depressing the price at the end of June.
Gold has also been boosted by the resurgence of interest in silver, which gained more than 12% this week.
It is the biggest weekly price increase for the metal for almost two years and follows better than expected economic data out of China and strong physical demand.
Shares in silver mines responded led by sector leader Fresnillo, which rose 17%, Hochschild Mining rose by 25% and minnow Arian Silver gained 45%. Spot silver today was trading above US$23 for the first time since around the start of June.
Platinum was US$4 lower at US$1,519 on the anniversary of last year’s massacre outside of Lonmin’s Marikana mine in South Africa.
