Closing prices are bids| Data source Refinitiv / Netdania See disclaimer at end of the report
|Weekly Price Review For The Week Ending||21-Nov-20||Report Date||22-Nov-20|
|OTC Spot Market|
|High Bid||Low Offer||Close||WTD
|Precious Metals Cross Rates|
versus $10Y TSY
|WTD Change %||1.28%||-6.78%||-3.99%||3.49%||-8.79%||-14.90%|
|YTD Change %||-8.78%||67.42%||7.41%||41.37%||81.00%||175.33%|
|Gold Prices in Other Currencies|
|WTD Change %||-1.63%||-1.19%||-1.95%||-1.58%||-2.39%||-1.45%|
|YTD Change %||18.56%||16.61%||23.09%||28.07%||51.44%||35.79%|
Gold had a solid start to the week rising $10 from the previous Friday’s close to post a high of $1899 in early Asian trade on Monday, however just when the yellow metal looked poised to break back above the psychologically important $1900 barrier news of another vaccine breakthrough in the battle against the COVID-19 pandemic was announced with drug maker Moderna claiming a 95% success rate in their late stage testing program. For the second week in a row this prompted a wave of long liquidation that drove gold sharply lower to reach $1875 but this 1% decline was much more shallow than the 5% collapse on the Pfizer news and gold quickly stabilised to bounce back to $1893 on Tuesday. The recovery was short lived with the market working its way lower to reach $1855 on Thursday before recovering to end another disappointing week down $18.50 or 0.98% at $1870.50.
Technically this latest set back for gold has generated a technical sell signal on the charts with the 50 day moving average moving below the 100 day MA and it is worth noting that there was significant ETF selling with a 1,7% decline in holdings worth $2.6 billion, however with the market in trading rather than trending mode support pegged at $1850 should contain further weakness although a clear break would bring the 200 day MA set at $1794 on to technical radar screens.
Silver also had a decent start on Monday with the industrial precious metal posting an early high of $25.07, up from the previous week’s close of $24.65, however the weakness in gold spilled over into silver with the price slumping by almost 6% to a low of $23.66 by Thursday amid reports of 7.5 Mio ounces of ETF liquidation as growing COVID-19 cases around the world cast a fresh shadow over the global economy and the outlook for industrial demand. A late rally on Friday saw silver pare its losses to end down 55 cents or 2.23% at $24.10 and in the middle of a well defined technical trading range bounded by support set at $23.25 and resistance located at $25.50.
Looking ahead to the coming week it will be interesting to see whether silver continues to track gold in its role as a cheap safe haven proxy or follows the direction of its industrial cousin copper, which will continue to be driven by the impact on the global economy of the COVID-19 pandemic.
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