Gold On Pace For Third Straight Weekly Advance

  • Posted Friday, June 20, 2014 at 08:36 PM

TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - Gold and Silver prices were mixed on Friday with Gold easing 0.75 percent to $1,315.60 an ounce as the yellow metal consolidates, but remains on pace for a third straight weekly gain, after the Fed’s dovish policy statement on Wednesday and the escalating turmoil in Iraq and Ukraine. “Clearly after a move like this, you will see some consolidation, so it’s natural to see gold pull back,” said Jeremy Baker, of Harcourt Investment Consulting AG. The price of Silver added 0.62 percent to $20.92 an ounce, its highest level since mid-March.

“There’s still conviction out there to be long the market,” says Adam Klopfenstein, of Archer Financial Services. “The major reason was the Fed, and the other one was the increase of Russian troops again in the Ukrainian border.” According to a report earlier today, over the past 24 hours, tanks and heavy artillery from southwestern Russia have been headed for the Ukraine border. Russia denied the accusation of a buildup and says that any troop movement near the Ukraine border is merely an attempt to bolster its own defenses against the civil war raging next door.

In the meantime, in Kiev, newly elected Ukrainian President Petro Poroshenko issued a unilateral declaration of cease fire that will last for a week and give pro-Russian separatists an opportunity to stop the fighting and surrender their weapons.

Meanwhile, in Iraq, the U.S. agreed on Thursday to send a limited number of Special Forces to help the ineffective Iraqi military to stem the attacks of the Al-Qaeda linked Sunni militant group known as ISIS that has been terrorizing the country and raising oil prices. The raids by ISIS sparked a rally in crude oil prices earlier this month, and now that Gold has rallied, Edward Meir, of INTL FCStone, says that the ratio between Gold and oil has returned to a more normal relationship. “The two complexes tend to correlate historically, but have been growing increasingly disconnected of late. The fact that Gold has now staged an upside advance may have returned the two complexes to closer harmony,” said Meir.

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