In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,196.35 down $26.15 per ounce (-2.14%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, fell 0.41%. The U. S. Trade-Weighted Dollar Index slipped 1.40% for the week.
Gold Market Strengths Gold traders were bullish for the fourth-consecutive week. The increased optimism related to gold prices stems from the recent turmoil in global markets as well as the continued dovish stance by the Federal Reserve.
Gold exports out of Switzerland reached the highest level this year. Furthermore, in order to meet rising demand from Asia, Swiss refineries are working at full capacity.
The Swiss National Bank introduced a negative interest rate on deposits this week. The move, aimed at relieving upward pressure on the franc, should make gold relatively more attractive than franc-denominated assets.
Gold Market Weaknesses President Barack Obama indefinitely withdrew more than 52,000 square miles of waters off Alaska’s coastline in order to protect the wildlife in the area. However, miners should get some leeway when it comes to the new law if the Republican-backed proposal bans the Endangered Species Act from applying to the sage grouse for one year.
Barrick Gold Corp. is suspending its Lumwana operations in Zambia following a newly established increase in the mining royalty rate. The rate is set to increase from 6 percent to 20 percent for all open-pit mines.
This post was published at GoldSilverWorlds on December 20, 2014.
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