Gold Logs Second Consecutive Winning Week; Still Below $1,300
The price of gold climbed higher for the second consecutive week and is now at its highest level in about a month. Silver closed the week lower. Both precious metals were relatively quiet as Federal Reserve Chairman Ben Bernanke presented his semiannual monetary report to Congress. The U.S. dollar finished the week in the red but did not make any dramatic moves. Meanwhile, the Dow Jones Industrial Average (NYSEARCA:DIA) increased for the fourth consecutive week.
Christopher Vecchio, currency analyst at DailyFX, said: “There are no ‘medium’ or ‘high’ rated USD events today — has quelled market volatility, allowing high beta currencies and risk-correlated assets to post modest gains. Overall, while it is clear that the Bernanke testimony didn’t prove to be the dovish knockout punch many were expecting, it wasn’t a major victory for hawks, either.”
Bernanke reiterated the central bank’s stance that a reduction in bond purchases does not mean policy is tightening. He also reminded market participants that the pace of bond purchases will be determined by incoming economic data.
“I emphasize that because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke said to the House Financial Services Committee.
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both increased about 0.9 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) jumped 5.1 percent and 3.9 percent, respectively. Shares of First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) both jumped almost 4 percent.
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Disclosure: Long EXK, AG, HL, PHYS