Precious metals saw a rise in prices across the board last week, with gold up 2.81% to $1086.30/oz and silver up 3.38% to $14.55/oz on the New York Spot Market. These increases came despite both metals touching multi-year lows over the course of the week.
Gold showed strong resiliency in the face of the release of November’s US jobs data: 210,000 jobs were created in November with an upward revision to October’s data. Bill O’Neill, founder of commodity investment firm Logic Advisors, told Reuters that these economic results are just a near-term short covering rally that doesn’t likely have legs.
The European Central Bank cut deposit rates late in the week, which sent the Euro soaring on Thursday and put pressure on the Dollar, which in turn added support to the gold price.
Retail investors were buying physical precious metals in large quantities last month, with the U.S. Mint reporting record high gold and silver coin sales. Gold Eagle sales in November reached 97,000 ounces, up 185% from October and 62% higher than last November. American Silver Eagles have already seen record annual demand: sales have topped 2014’s 44 million ounces through November, reaching 44.67 million ounces. The Mint has said that it is not going to produce any more Gold Eagles and that it will not take any more orders for Silver Eagles until December 14th.
Former Texas Congressman and outspoken libertarian Ron Paul spoke about the value of the U.S. Dollar in an interview. While the dollar is strong right now, Mr. Paul suggested that low interest rates have fueled a dollar overvaluation that will have to be unwound in the future and could lead to financial crisis.
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(Sources: “Gold rebounds from 2010 lows after ECB rate decision,” Reuters, December 3, 2015; “John Paulson Maintains Gold Stake As Prices Touch 5-Year Lows,” Newsmax, December 4, 2015; “US Mint American Eagle gold coin sales surge, silver at record,” CNBC, December 1, 2015; “Market acting ‘Strange; Manipulation at Play—Former Congressman Ron Paul,” Kirxo, December 1, 2015; “Robust Jobs Report All but Guarantees the Fed Will Raise Rates,” New York Times, December 4, 2015)
