|Gold Snaps Four Week Slide While Greece Wins Four Month Reprieve |
Los Angeles CA, (Tangible Investments) - by James O’Dell - Gold and Silver prices edged higher on Friday, with Gold adding $3.90 or 0.32 percent to finish the week higher at $1,213.50 an ounce, ending a four week slump after fourth quarter economic growth in the U.S. was negatively revised to 2.2 percent from an initial 2.6 percent estimate, as premiums for physical Gold on the Shanghai Gold Exchange (SGE) remained firm between $4-$5 an ounce. The price of Silver gained $0.04 or 0.24 percent to end the week at $16.61 an ounce, while the Gold/Silver ratio inched up to 73.06.
The week began with disappointing economic news that included U.S. existing home sales falling 4.9 percent to 4.82 million in January, well below expectations of 5.00 million. The Dallas Fed Index plunged to -11.2 in Feb, far below expectations of -4.0 and further raises doubts that the Fed will raise interest rates later this year.
Market focus shifted to Fed Chief Yellen as she delivered testimony before the Senate Banking Committee on Tuesday, and the House Financial Services Committee on Wednesday. Yellen reiterated her stance that the Fed will be “patient” in normalizing its monetary policy and changes will be data dependent.
In the meantime, proposed reforms submitted by Greece to the European Commission (EC) were received positively and affirmed, in the eyes of the EC, that the Greek government's offer was "sufficiently comprehensive" to win them the four month reprieve that they sought. The EC did, however, urge Greece to take "swift" action in implementing the reforms.
EC Vice-President, Valdis Dombrovskis, and EC Commissioner, Pierre Moscovici said that "this list is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review." The officials then added that they are "encouraged by the commitment to combat tax evasion and corruption through, inter alia, efforts to modernize tax and custom administrations, as well as to pursue reforms to modernize the public administration."
Investors from China arrived back from their Lunar New Year break with solid pent-up demand as premiums on the Shanghai Gold Exchange (SGE) rose to between $5 and $6 an ounce indicating robust demand from the world's No. 2 Gold consumer. Gold prices saw an uptick in buying momentum, onThursday, a signal that the market could be base-building, said James Chen of U.K. based City Index.
“With major downside support residing around the 1180 level, the current price area could serve as a tentative bottoming stage for the precious metal,” said Chen. “If the price of Gold is able to stay above 1180 support, a significant rebound could push price back up to resistance targets at 1240, 1265, and 1300. Any breakdown below 1180 support could once again prompt a return to re-test November’s 1130-area multi-year low.”
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