Precious Metals Market Updates March 29 – April 1

Welcome back investors to another weekly Instant Update! Hope everyone enjoyed their long weekend and had a happy Easter! This past week was a shorter trading week for Gold as markets closed Thursday evening as we had Good Friday and Easter Holiday in North America and Europe. Gold prices were quite predictable and lots of price action and volatility present. To begin the week Gold found a major correlation with the US Bond Market. As the Bond market rose early in the week, Gold prices fell as expected. The price of the yellow metal fell as low as $1680 (USD/Oz) early in the week. In addition to the rise in the Bond market, the US Consumer Confidence report was released on Tuesday. With the optimism of economic recovery, the actual consumer confidence was much higher than what was forecasted. This news strengthened the Dollar and in turn, also acted as a predictable element behind the fall in Gold prices.

Then later on in the week Gold recovered in correlation to the Bond market sell-off. With the weaker Bond market near the end of the week, the US Dollar also slightly weakened, thus making room for Gold prices to shoot back up. The cause of the weakening Dollar was a result of the monthly decrease in employment. Not only that but the month over month pending home sales also decreased. This is a major indicator of how the economy is doing. Purely due to the fact that the sale of a home triggers a ripple effect that stimulates the economy. For instance, a sale of a home results in renovations done by the new owners, a new mortgage is given out by the bank, and real estate brokers are paid to execute and create the deal.

The relation between Gold and the Bond market has made the price action quite predictable. Now of course they are not directly correlated as there are other factors that can affect the price of Gold. However, this relation between Bonds and Precious Metals might be something to monitor closely. As we are now into Q2 of 2021, we are hopeful to see more upside in Gold prices as a result of opposing downside to stimulators.

The begging of the week was not the greatest for Gold to say the least. With the rise in the Bond market and increased consumer confidence, we saw Gold prices fall. The drop was quite drastic as it broke through the $1700 (USD/Oz) psychological resistance. Prices fell to the next support level of $1680 (USD/Oz) before consolidating. Early in the week Gold closed at $1684.55 (USD/Oz).

Midweek Gold prices recovered from the early week losses. This resulted from the Bond market sell-off. Additionally, the weakening Dollar is a result of decreased employment and pending home sales. These factors pushed Gold prices back over the $1700 (USD/Oz) key level. Midweek Gold closed at $1707.40 (USD/Oz).

Finally, to end the short week off, Gold prices went up even more from Wednesday’s high. This move was an impulsive move from the upwards trend the market was going in. Gold ended the week closing at $1729.94 (USD/Oz).