Finally, Gold Back Over The Key $1,800 Resistance Level
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Stuppler & Company is proud to provide our clients this Weekly Market Report (WMR). The report gives you my overview of the prior week’s precious metal and rare coin market activity and news. In each WMR I share the current status of Gold and Silver along with their support and resistance levels. |
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This Week's Headlines: |
After breaking down below the key $1,800 level in late November, Gold showed good demand last week finally moving above that resistance level. A sell-off in the U.S. Dollar Index (reaching 96) and interest rates (trading at 1.34%) helped increase Gold demand. On Thursday, Gold reached a high of $1,811 per ounce and closed the short holiday week at $1,809, up $27 for December.
As we approach year-end, there will be very little economic news coming out that would affect the price of precious metals. What we are seeing is many of the world’s largest mints offering the popular 2022 bullion coins with limited production. Our allocations are lower than 2021, and I believe the premiums will remain strong considering the current strong demand.
I need our American clients to remember that Gold is real money. The reason the Gold price goes up is to reflect the loss in purchasing power of the US dollar. In other words, the rising price of Gold is correlated inversely to the US dollar’s actual purchasing power loss. History has shown us that Gold moves dramatically higher after the effects of inflation have settled in and have taken their toll – not before and not in anticipation of those effects. We have just started to see the effects of higher product/services and wage inflation.
December has been a good month for the Gold price during the past four years, and last year showed an increase of over $100 in the month of December. It would be healthy for the Gold market if Gold could close the year above $1,820 per ounce.
Today: Gold traded today between $1,802 and $1,814 as it consolidates recent gains above the key $1,800 level. Concerns about the Omicron variant spreading throughout the world is keeping the U.S Dollar Index above the key 96 level.
Silver moved toward the key $23.00 per ounce resistance level last week, closing at $22.90 on Thursday. After reaching a yearly low of $21.41 on December 15th, Silver has rallied $1.49 per ounce on excellent physical and contractional demand. Many professional commodity traders I have spoken with over this holiday weekend are flat, and waiting for an opportunity to take position after the first of the year. Silver at the current price level is an extraordinary bargain, especially with a Silver-to-Gold ratio at 79-to-1.
Today: The Silver price started the day weaker, reaching a low of $22.61 before seeing a serious rally. Silver moved above the key $23 level, reaching a high of $23.19 per ounce as Gold started moving higher.
