Precious Metals Prices Get a Boost from Ben: Weekly Gold ETF Update

July 15, 2013

Precious metals prices got a boost this week as a result of remarks made by Federal Reserve Chairman Ben Bernanke during a question-and-answer session following his speech before the National Bureau of Economic Research (NBER) in Cambridge, Massachusetts on Wednesday.  Dr. Bernanke noted that a “highly accommodative monetary policy” would remain in place “for the foreseeable future” because the current unemployment rate of 7.6 percent “overstates” the health of the economy.  Widespread belief that the dreaded “tapering” of the Fed’s bond-buying program will not necessarily begin in September – as previously thought – brought a welcome rally for precious metals prices as the dollar weakened.

According to the July 9 edition of the Commodity Futures Trading Commission’s Commitments of Traders Report, net long positions on gold increased by more than four percent during the week.

Despite Friday’s dip by one basis point, the spot price of gold made a big move up toward its 50-day moving average of $1,356.30 per ounce, by finishing the week at $1,283.40 per ounce.

The chart below depicts the trading activity in the SPDR Gold Trust ETF (NYSEARCA:GLD) during the past 180 days.

ETF, gold, NYSEARCA:GLD, NYSEARCA:IAU, NYSEARCA:SLV, NYSEARCA:AGQ, NYSEARCA:PPLTAfter falling 0.85 percent during the first week of July, GLD made a strong, 5.11 percent rebound during the week ending July 12.  At Friday’s close, GLD was 5.30 percent below its 50-day moving average of $131.09.  The MACD has now crossed back above the signal line, suggesting a further advance.  Its Relative Strength Index jumped to 47.01 from last week’s 32.07.  Commodities Update: July 12, 2013

The following is a summary of how precious metal spot prices and ETFs performed from the close on Friday, July 5 until the close on Friday, July 12:

Gold ETF Update: 

Gold Spot Price:  $1,283.40/oz,    +5.82%

SPDR Gold Trust ETF (NYSEARCA:GLD):  +5.11%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account.  The gold spot price for NYSEARCA:GLD is determined by the 24 hour global over-the-counter (OTC) gold market.  The SPDR Gold Trust ETF (NYSEARCA:GLD) is the world’s largest gold ETF and second largest ETF in existence.

iShares Gold Trust ETF (NYSEARCA:IAU):  +4.00%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account.  The iShares Gold Trust ETF (NYSEARCA:IAU) is backed by gold held in trusts located in London, Toronto, and New York.  The gold spot price for the iShares Gold Trust ETF (NYSEARCA:IAU) is set by the London PM Fix Price for spot gold as determined by the London Bullion Market Association.

Silver ETF Update:

Silver Spot Price:  $19.87 oz,   +5.13%

iShares Silver Trust ETF (NYSEARCA:SLV):  +5.49%, This ETF reflects the current price of silver and trends of Silver Bullion and so offers exposure to the silver market within a brokerage account.  The iShares Silver Trust ETF (NYSEARCA:SLV) is backed by real silver and the silver price is set by the London PM Fix Price for silver as determined by the London Bullion Market Association.

ProShares Ultra Silver ETF (NYSEARCA:AGQ):  +11.25%, This ETF reflects the 2X daily return of the current price of Silver Bullion.  The ETF is priced in US dollars based on the afternoon closing price of Silver in London.  The ProShares Ultra Silver ETF thus offers double exposure to the silver market within a brokerage account.

Source: http://wallstreetsectorselector.com/2013/07/precious-metals-prices-get-a-boost-from-ben-weekly-gold-etf-update/

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