- July 3, 2014
- Category: This Week in Gold
This week in gold, a week cut short by the 4th of July holiday tomorrow, we saw some precious metals rally and learned the basics of coin grading and mint states. We sought to explain why this happened and gave analysts’ opinions.
Today, markets are reacting to economic news on employment and interest rates. Fed chairwoman Janet Yellen spoke at an International Monetary Fund (IMF) event yesterday in Washington, D.C. and re-affirmed the audience that she does not see the need for the Fed to raise interest rates right now. “I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment, in order to address financial stability concerns,” she said.
Also yesterday, ADP’s June National Employment Report (also known as the non-farm payroll report) showed the private sector added 281,000 jobs last month, which is well above what economist expected. Another jobs report released today by the Bureau of Labor Statistics shows the U.S. economy added 288,000 jobs last month and unemployment has dropped to 6.1%, its lowest rate since September 2008. However, long-term unemployment is still a concern.
The gold market tends to be sensitive to economic news coming from government sources, but remember that after last month’s Fed meeting, despite somewhat positive statements on the economy that would usually bring gold down, gold went up. Analysts believes this may be due to investors growing increasingly skeptical of the Fed.
Gold Achieves 10-Week High, Largest Monthly Gain Since February
On Monday gold ended the trading day at $1,322 an ounce – a 10-week high, 6.1% gain for the month of June, and 3% gain for Q2. Analysts pointed to several contributing factors including bargain buying, a weak U.S. dollar, and a lack of change in EU inflation rates. Chris Gaffney, senior market strategist at EverBank Wealth Management, called geopolitical tensions the “wild card” for the market, advising investors to watch for any sudden flare-up in Iraq, Ukraine, or North Korea that could spark safe-haven buying. Today, gold closed at $1,320.50 an ounce.
Be an Educated Investor – Learn the Basics of Coin Grading and Mint States
Before you consider buying precious metal coins, it’s useful to know the basics of coin grading. Coin grading is a process that determines the physical condition, quality, rarity, interest factor, and liquidity of a coin. Become an informed investor and read more about the coin grading system and terminology used by most major coin grading companies.
Platinum and Palladium Ride on Supply Shortage
Platinum reached an impressive 10-month high in early trading on Wednesday, July 2, while palladium rose 0.1% to achieve its eighth straight session of gains – the longest run since 2012. Platinum and palladium are heavily used in the automobile industry which is currently experiencing higher than average demand. In addition, supply shortages from the recently-ended South African platinum mine strike are having their effect on the markets. Investing analyst Rick Mills gave an important take on the matter. Read more on what is driving platinum and palladium demand.
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