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Gold took a large loss this week after prices for the bullion dropped from $1,901/oz last Friday to $1,791/oz at the time of writing. This represents a loss of -5.78%. The yellow metal experienced highs of $1,905/oz and lows of $1,770/oz, the lowest price in 7 weeks.
Gold (6 MONTHS)
Source: Tradingview; NYMEX
Silver took a very similar tumble to gold. The white metal lost -5.90% of its value over the last 7 days as it fell from $28.11/oz to $26.45 at the end of this week. Silver prices experienced highs of $28.43/oz and lows below the $26 level at $25.84/oz. This is the lowest price in 7 weeks.
Silver Price (6 MONTHS)
Source: Tradingview; COMEX
Platinum prices dropped its prices from $1,151/oz 7 days ago to $1,078/oz at the time of writing demonstrating a major loss of -6.34%, The metal experienced highs of $1,172/oz and lows of $1,045/oz, the lowest price in 22 weeks.
Platinum Price (6 MONTHS)
Source: Tradingview; NYMEX
Palladium too fell massively as it recorded a -6.90% loss this week dropping from its price of $2,779/oz last Friday to $2,587/oz today. The industrial metal experienced highs of $2,840/oz and lows of $2,586/oz the lowest price in 13 weeks. Since reaching its all-time high of $3,015/oz at the start of May, the metal is down a total of -14.19%.
Rhodium, after losing -22.5% of its value in the last month, only lost out -2.22% this week as it saw its price drop from $22,500/oz to $22,000/oz.
The entire precious metals market dipped following the release of the FOMC meeting. The US Federal Reserve kept the promise of keeping interest rates at levels near zero although, for the first time have signaled higher interest rates by the end of 2023. Officials from the FOMC have also said that “progress on vaccinations has reduced the spread of covid-19 in the US“ and along with strong policy support “indicators of economic activity and employment have strengthened”.
Rumors that the Fed would cease its asset purchases at US$120 billion a month have been blown out of the water as the Fed has promised to continue until “substantial further progress” has been made on employment and inflation.
In response to the news, the US Dollar Index (DXY) experienced a substantial jump from 90.54 to 91.91, reaching levels at which it was at almost 10 weeks ago. Furthermore, the US 10 Year Treasury note increased its yield to 1.580% from 1.498%.
The overwhelmingly positive support from the Fed has pulled cash out of the precious metals market and into the active economy. Fed Chairman Jerome Powell stated that the current inflationary rise is due to be temporary but that if it persists, it’s a risk that cannot be ignored. It seems that as long as interest rates remain at their current levels of 0.25%, gold bulls and precious metal investors alike will have an uphill battle to fight.