by Taki, Gold Silver Worlds:
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,107.78, down $15.67 per ounce (1.39%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, lost 1.49%. The U.S. Trade-Weighted Dollar Index lost 1.09% for the week. Junior tiered stocks outperformed seniors for the week as the S&P/TSX Venture Index was off just 0.98 percent outpacing the GDM Index.
Gold Market Strengths
Foreign exchange figures released Monday suggest China added around 16 million tons of gold in August, according to UBS. Gold watchers will be paying attention to see if China continues its recent trend of publishing its gold accumulation on a monthly basis.
The demand for imported gold in China seems to be improving, based on higher premiums paid for the metal.
Palladium was the best performing precious metal for the week, up 4.08 percent. According to Goldman Sachs, 70 percent of global palladium demand originates from catalytic convertors found in gasoline dependent motor vehicles. Auto demand has been more than robust, averaging growth of over 5 percent year-over-year y in the last 12 months.
Silver outperformed gold for the week. Sales of silver coins at the U.K. Royal Mint have tripled from April to August, compared with a year ago.
Gold Market Weaknesses
Consumer sentiment declined in September to the lowest level in a year as Americans anticipated a weaker economy in the face of a global slowdown and turbulent financial markets. HSBC expects the FOMC to forego a rate hike next week. If that is the case, gold will remain subdued, in expectation of the eventual hike.
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