Precious Metals Market Updates Feb 22 – Feb 25



Welcome back to another weekly instant update! This past week has been quite the eventful one for Gold. Nearing the end of the week we saw a sharp dive in Gold prices, one that came as a shock to many but was also expected by many. This fall was over 4%, which marked the biggest fall in prices since November. A major player that was a key determinant of this fall yielded from U.S. government bonds growing on the weekly timeframe. As a result, the risk-appetite changed resulting in investors liquidating their positions and shorting Gold, and putting their money into other assets. Another key indicator of Gold’s fall was the strength in the US Dollar. As the US Dollar index (DXY) increased, it was another negative correlation for precious metals as they tend to move in the opposite direction of the DXY. Federal Reserve Chairman, Jerome Powell also spoke last week about the surge in yields as well as a rise in interest rates. These two give the US economy a positive outlook for the near future as they are both signs of economic recovery. The optimism of a strengthening US Economy was another huge player that resulted in Gold prices to have such a big fall. All this news may seem like great news for the US Economy, but it does not include a lot of key information that is yet to be released. First, calculating inflation, especially after the Biden administration’s stimulus plan. Second, the unemployment rate is still exceptionally high. Although it is decreasing, it is improving at a slow pace and one that is not meeting the forecasted targets. All this news is presenting investors with an opportunity to be able to get into more positions at significantly better levels. Right now with Gold prices at these low marks, many smart investors are locking in prices on Gold and holding for the next bull run. Kudos to these investors as they are looking at reaping a large return on investment.

The week began on a positive note for Gold with a 26 point rise in prices upon market open and the previous close. This was a result of a fall in the US Dollar at the start of the week. Early in the week Gold closed at $1811.06 (USD/Oz).

Midweek Gold was unable to maintain its bullish structure and fell to the major psychological support level of $1800 (USD/Oz). This was a result of Jerome Powell’s congressional testimony. Midweek Gold closed at $1803.07 (USD/Oz).

The end of the week is when we saw the massive dive in Gold prices, falling as low as $1720 (USD/Oz) before correcting itself and rising back up slightly. Gold ended the week by closing at $1734.60 (USD/Oz).