Gold Price hits same bottom 4th time: the week till 25/05 in review

The weekly review by BullionVault.com, shows that gold and silver followed a similar pattern as one week ago: a drop in the first days of the week followed by a bounce towards the end of the week. In particular, the gold price dropped on Wednesday to 1534 US dollar per ounce, but then rallied back very fast to close the week at 1569 on Friday at the London PM fix. That’s a weekly close with a loss of some 20 dollar.

Silver followed a comparable price action, but it recovered better than gold on a weekly basis. Silver closed the week on 28.24, down 0.9% week-on-week.

Of course, the main theme during the past week was Europe with its economic woes. The euro fell to 1.25 dollar. The Greek exit is now openly discussed by officials in Brussels, while financial analists give some 50% chance for a Greek exit. Citigroup on the other hand, forecasts that Greece will exit the euro on 01/01/2013. On European the bond markets, we saw the German 2 year  yield hit 0.07% and the French 10 year hits its lowest level.

Central banks in the meanwhile keep on accumulating gold on a global scale. They have increased 80 tonnes of gold to their positions in the first quarter of 2012. In April, an additional 40 tonnes has been bought. Countries like the Philipinnes and Russia are adding or are planning to add considerably more.

As explained in another post titled Central banks and China provide solid support for the gold price, we provide more details about the motives for the Central Banks to accumulate gold. We also explain that the reported figures could possibly be higher in reality.

 

Courtesy of BullionVault.com

 

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