Gold Price Jumps More Than $20 - Gainesville Coins News
No Minimum order! We accept Pay with Credit Card
Call Us: (813) 482-9300 Mon-Fri 9:00AM-6:00PM EST
Login or Register
Log into your account
About Gainesville Coins ®
Billions Of Dollars Bought And Sold A+ BBB Rating 10+ Years No Hidden Fees Or Commissions All Inventory Ships Directly From Our Vault

Gold Price Jumps More Than $20

blog | Published On by
Gold Price Jumps More Than $20
gold-victory-stack

Spot gold has risen over $20 an ounce in early New York trading, while silver gains nearly 5%. Precious metals got a second boost this morning, as housing starts fell by 8.8%.

Rising oil prices due to an oilworkers' strike in Kuwait have lifted stocks across the globe, but higher oil prices are also bullish for gold. The dollar had lost ground overnight, but its drop accelerated on the housing starts report.

Quotes at 9:30 am Eastern time had gold up $22.30 to $1254.80; silver was up $0.80 to $17.01; West Texas Intermediate crude up $0.32 to $40.10; and Brent crude up $0.47 to $43.38.

This morning's technical numbers for gold have first resistance at $1,255 an ounce. The next barrier is seen at $1,262. Gold is finding initial support at $1,246 an ounce. If this should fall, the next support line is at $1,241.

China Gold

china-jewelry

Heavy buying today greeted the inauguration of the Shanghai gold fix. This twice daily fix is denominated in yuan instead of Western currencies. China is the world's largest consumer of gold, but has had little influence in setting prices. This led to the creation of this yuan-denominated gold fix.

Beijing also sees the Shanghai gold fix as a way to encourage wider international use of the yuan.

Kuwait Oil Strike

oil glut

The oilworkers' strike in Kuwait is in its third day, and its influence on global oil prices continue to grow. The strike helped blunt some of the fallout Monday of the failure of the Doha oil meeting to reach an agreement. The strike is not expected to last long, so the support of oil prices is only temporary.

Also in the world of oil post-Doha, Russia announced that it would be increasing production. In an apparent warning to Iran, Saudi Arabia announced that if any nation increased exports, they would dump another million barrels of oil a day onto the global market.

Gloomy Housing Numbers

housing

Housing numbers across the board this morning were worse than the gloomiest forecast. Housing starts posted a -8.8% loss, single family home construction was -9.2%, and building permits were -7.7% from a year ago. This news accelerated the dollar's decline, helping precious metals.

The losses in the housing market should also give pause to any plans by the Fed to hike interest rates in the near future. The CMEgroup FedWatch tool tracks Fed funds rates futures to predict the probability of a rate hike. This morning, if give a 2% chance of a rate hike next week, and a 17% chance of a rate hike at the FOMC's next meeting in June.

Hi Ho, Silver!

silver_bull

Spot silver is up 13% from last month's lows, and silver futures are up 22% YTD. This silver rally is getting some of the credit for rising gold prices. Spot silver hit a 10-month high in London on Tuesday, and extended those gains in New York. Some analysts see this as evidence that the gold:silver ratio had grown too wide, and this rally is a snap back towards the mean.

Robust physical silver and ETF demand isn't the only thing driving prices Hedge funds have never been this bullish on silver since records began in 2006.

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for SurvivalBlog.com.

This site uses cookies for analytics and to deliver personalized content. By continuing to browse our site, you agree that you have read and understand our Privacy Policy.