Last Friday proved exceptionally volatile, to a degree not typically seen in precious metals. With conflict in the Middle East once again making headlines, there could be further volatility for gold and silver this week.
Gold jumped to a new all-time high of $2,431.85 on Friday before pulling back sharply to $2,345 at the weekend close. In Euros, this equated to a new high of €2,287.27 per ounce, before closing at €2,207. Although the rise and fall were certainly dramatic, they only represented that single day, basically leaving gold flat on Thursday’s close, and still up for the week. Gold remains up 15% in the past three months and could still have some surprises in store.
Silver also saw exceptional gains, and a similar drop. Having hit multi-year highs on the way to $30, silver also pulled back to close at $27.95 per ounce for the weekend. In Euros, this saw silver briefly hit €28.03, before closing at €26.30. Again, silver only lost Friday’s gains in the long run, and remains up an incredible 25% in the past three months.
News on Saturday that Iran launched a major strike against Israel has bought geopolitics back to the front of investor minds. Although previous warning had been given, the attack still marked yet another step of escalation in the Middle East, and saw the US and UK involved in defending Israel. If Israel responds with further attacks on Iran it could result in the conflict escalating even further.
So far today, gold has recovered slightly at the open, and is up 0.3% at the time of writing, trading at $2,350 per ounce. Silver has had a better day however and is up more than 2.5%. There are still some swings up and down, but today so far is at least proving less dramatic than Friday.
For Euros this leaves gold just over €2,200 per ounce. Silver has been flirting with €27 per ounce on-and-off this afternoon as well.
A period of consolidation could be considered overdue following several weeks of impressive gains, and if gold can hold above $2,300 over the course of the week that should still be seen as positive for the metal. Any escalation in the conflict however could drive even more safe haven buying, as we saw this weekend as news of the attack broke. Many investors will be patiently waiting for Friday’s new records to return once more though.
