With gold’s 2013 spot price decline expected to approach 30 percent, analysts see 2013 as gold’s worst year since 1981.
Although a weakened dollar helped give gold prices a slight boost during the past week, the spot price for gold is
expected
to register a nearly 30-percent drop during 2013, for the most
significant decline since 1981. Worse yet, a number of analysts – such
as Jeffrey Currie at Goldman Sachs – see gold prices falling lower.
Currie expects gold to sink as far as $1,050 per ounce at this point
next year.
Gold prices had been suffering from publicity surrounding the anticipated taper of the Federal Reserve’s bond-buying program. The quantitative easing program is credited with pushing gold prices to record highs during 2011. The weakening of the dollar resulting from quantitative easing had enhanced gold’s status as a “safe haven”. As a result, the phase-out of QE has been seen as a threat to gold prices. Although many commentators believed that the impact of the taper on the gold market had already been priced-in, trading activity since the December 18 FOMC meeting has proved them wrong.
By December 18, the latest bearish, head-and-shoulders pattern was fully-formed on the chart for gold’s spot price, setting the stage for the 2.52 percent swoon on December 19. Despite gold’s advances since that point, it has not yet reached the December 18 closing price of $1,217.80. The spot price of gold will need to reach $1,235 per ounce before it can break the neckline of the December head-and-shoulders pattern. More important, it must reach $1,322 per ounce before it reaches the neckline of the October 17 – November 11 head-and-shoulders pattern in order to break its curse.
The chart below depicts the trading activity in the SPDR Gold Trust ETF (NYSEARCA:GLD) during the past 180 days (Chart courtesy of Stockcharts.com).
As with the spot price of gold, yet another bearish, head-and-shoulders pattern has been formed on the chart for GLD during December. (This pattern is more readily-apparent on a chart drawn with a solid line rather than candlesticks.)
Although GLD managed to advance 1.01 percent to $117.12 during Christmas week, GLD finished Friday’s session 4.37 percent below its 50-day moving average of $122.48.
GLD’s Relative Strength Index climbed to 42.64 from last week’s 37.22. The MACD has just crossed above the signal line, suggesting that GLD could continue its advance during the immediate future.
The following is a summary of how precious metal spot prices and ETFs performed from the close on Friday, December 20 until the close on Friday, December 27:
SPDR Gold Trust ETF (NYSEARCA:GLD): +1.01%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The gold spot price for NYSEARCA:GLD is determined by the 24 hour global over-the-counter (OTC) gold market. The SPDR Gold Trust ETF (NYSEARCA:GLD) is the world’s largest gold ETF and second largest ETF in existence.
iShares Gold Trust ETF (NYSEARCA:IAU): +1.11%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The iShares Gold Trust ETF (NYSEARCA:IAU) is backed by gold held in trusts located in London, Toronto, and New York. The gold spot price for the iShares Gold Trust ETF (NYSEARCA:IAU) is set by the London PM Fix Price for spot gold as determined by the London Bullion Market Association.
iShares Silver Trust ETF (NYSEARCA:SLV): +3.49%, This ETF reflects the current price of silver and trends of Silver Bullion and so offers exposure to the silver market within a brokerage account. The iShares Silver Trust ETF (NYSEARCA:SLV) is backed by real silver and the silver price is set by the London PM Fix Price for silver as determined by the London Bullion Market Association.
ProShares Ultra Silver ETF (NYSEARCA:AGQ): +7.04%, This ETF reflects the 2X daily return of the current price of Silver Bullion. The ETF is priced in US dollars based on the afternoon closing price of Silver in London. The ProShares Ultra Silver ETF thus offers double exposure to the silver market within a brokerage account.
ETFS Physical Platinum Shares ETF (NYSEARCA:PPLT): +3.25% This ETF reflects the current spot price of physical platinum and so offers exposure to the platinum market within a brokerage account. The price of platinum is specified by the London Platinum and Palladium Market (LPPM) rules and is backed by Platinum held in vaults in London, UK and Zurich, Switzerland.
Bottom Line: Although gold prices made an advance in the one-percent range during Christmas week, they have yet to return to their pre-FOMC meeting level, before the announcement that the Fed would begin to taper its bond purchases.
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Although a weakened dollar helped give gold prices a slight boost during the past week, the spot price for gold is
expected
to register a nearly 30-percent drop during 2013, for the most
significant decline since 1981. Worse yet, a number of analysts – such
as Jeffrey Currie at Goldman Sachs – see gold prices falling lower.
Currie expects gold to sink as far as $1,050 per ounce at this point
next year.Gold prices had been suffering from publicity surrounding the anticipated taper of the Federal Reserve’s bond-buying program. The quantitative easing program is credited with pushing gold prices to record highs during 2011. The weakening of the dollar resulting from quantitative easing had enhanced gold’s status as a “safe haven”. As a result, the phase-out of QE has been seen as a threat to gold prices. Although many commentators believed that the impact of the taper on the gold market had already been priced-in, trading activity since the December 18 FOMC meeting has proved them wrong.
By December 18, the latest bearish, head-and-shoulders pattern was fully-formed on the chart for gold’s spot price, setting the stage for the 2.52 percent swoon on December 19. Despite gold’s advances since that point, it has not yet reached the December 18 closing price of $1,217.80. The spot price of gold will need to reach $1,235 per ounce before it can break the neckline of the December head-and-shoulders pattern. More important, it must reach $1,322 per ounce before it reaches the neckline of the October 17 – November 11 head-and-shoulders pattern in order to break its curse.
The chart below depicts the trading activity in the SPDR Gold Trust ETF (NYSEARCA:GLD) during the past 180 days (Chart courtesy of Stockcharts.com).
As with the spot price of gold, yet another bearish, head-and-shoulders pattern has been formed on the chart for GLD during December. (This pattern is more readily-apparent on a chart drawn with a solid line rather than candlesticks.)
Although GLD managed to advance 1.01 percent to $117.12 during Christmas week, GLD finished Friday’s session 4.37 percent below its 50-day moving average of $122.48.
GLD’s Relative Strength Index climbed to 42.64 from last week’s 37.22. The MACD has just crossed above the signal line, suggesting that GLD could continue its advance during the immediate future.
The following is a summary of how precious metal spot prices and ETFs performed from the close on Friday, December 20 until the close on Friday, December 27:
Gold ETF Update:
Gold Spot Price: $1,213.70/oz, +0.92%SPDR Gold Trust ETF (NYSEARCA:GLD): +1.01%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The gold spot price for NYSEARCA:GLD is determined by the 24 hour global over-the-counter (OTC) gold market. The SPDR Gold Trust ETF (NYSEARCA:GLD) is the world’s largest gold ETF and second largest ETF in existence.
iShares Gold Trust ETF (NYSEARCA:IAU): +1.11%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The iShares Gold Trust ETF (NYSEARCA:IAU) is backed by gold held in trusts located in London, Toronto, and New York. The gold spot price for the iShares Gold Trust ETF (NYSEARCA:IAU) is set by the London PM Fix Price for spot gold as determined by the London Bullion Market Association.
Silver ETF Update:
Silver Spot Price: $20.08 oz, +3.50%iShares Silver Trust ETF (NYSEARCA:SLV): +3.49%, This ETF reflects the current price of silver and trends of Silver Bullion and so offers exposure to the silver market within a brokerage account. The iShares Silver Trust ETF (NYSEARCA:SLV) is backed by real silver and the silver price is set by the London PM Fix Price for silver as determined by the London Bullion Market Association.
ProShares Ultra Silver ETF (NYSEARCA:AGQ): +7.04%, This ETF reflects the 2X daily return of the current price of Silver Bullion. The ETF is priced in US dollars based on the afternoon closing price of Silver in London. The ProShares Ultra Silver ETF thus offers double exposure to the silver market within a brokerage account.
Platinum ETF Update:
Platinum Spot Price: $1,374.20 /oz, +3.23%ETFS Physical Platinum Shares ETF (NYSEARCA:PPLT): +3.25% This ETF reflects the current spot price of physical platinum and so offers exposure to the platinum market within a brokerage account. The price of platinum is specified by the London Platinum and Palladium Market (LPPM) rules and is backed by Platinum held in vaults in London, UK and Zurich, Switzerland.
Bottom Line: Although gold prices made an advance in the one-percent range during Christmas week, they have yet to return to their pre-FOMC meeting level, before the announcement that the Fed would begin to taper its bond purchases.
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