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Gold slips slightly but silver turns in sterling performance

Thursday, April 14, 2016

Gold lost some ground on Wednesday (13 April) from its three-week peak recorded at the start of the week, as the US dollar increased in value and there was stronger news on China’s economic performance.

Gold tends to be strong when the dollar is weak and vice-versa, and the precious metal had benefited from recent dips in the value of the US currency. The dollar had fallen to its lowest value in almost eight months at the start of the week, but it made some gains on the back of the positive economic data from China and improved performances in the European stock markets.

Afshin Nabavi, head of trading at MKS, told Reuters: “Stronger equities and a relatively stronger dollar have put some pressure on gold.”

Gold’s highest value so far this week was on Monday (11 April), when it reached £888.16 per troy ounce at 07.15. This morning at 08:30 (Thursday), gold was valued at £878.61 per troy ounce.

Sterling performance from silver

All eyes may have been on the gold price so far this year, but silver has also been attracting investors and making gains.

In fact, this week the gold-silver ratio – how many ounces of silver are required to buy one ounce of gold – actually saw silver outperform gold. Gold fell to a three-and-a-half-month low on the ratio, as silver added value.

Silver hit its highest value in almost six months this week, when demand helped push the price over the £11.25 per troy ounce mark.

Reuters reported that there have been “sharp inflows” into silver-backed exchange traded funds, showing keen interest from investors. Silver, like gold, is widely used in technology and is also a key part of many industrial processes.

As well as funds, silver coin collecting is also a good way to start your silver investment, and the current decent prices are certainly worth keeping an eye on.

Gold scores best quarterly performance in three decades

The resurgence in the gold price seen so far this year is the best in almost 30 years, according to the World Gold Council’s (WGC) analysis of the quarterly figures – and the organisation sees no sign of demand for the precious metal running out of steam.

Between January and the end of March, the gold price jumped by 17 per cent in dollar terms. Its performance was also ahead of other major commodities and bonds as investors sought a safe haven for their money in stormy economic seas.

The WGC report on the first three months of the year said: “So far, we have had one very strong quarter.

“But inflows into gold look, to us, set to remain robust in second quarter, as the current macroeconomic environment remains supportive for both investment and central bank demand.”

The report also noted the strong demand from investors for gold bullion coins. Figures showed that sales of the US Mint’s 24 carat Buffalos and 22 carat Eagles were 51 per cent higher than during the first three months of last year.