The price of gold closed at $1,247 on Friday, ending the week higher by 1 percent. Silver rallied to $19.91 on Friday, a 2 1/2 year high, closing higher by 1.7 percent for the day and gaining 4.25 percent for the week.
The ratio of gold to silver – the number of ounces of silver that are needed to buy an ounce of gold – fell to its lowest level since mid-May at 64.29.
The week began with gold analysts predicting a tenth annual advance in gold bullion prices and raising their forecasts for the price of gold dramatically for 2011.
Dan Brebner, analyst at Deutsche Bank in London and the most accurate forecaster for gold so far this year, says gold bullion could reach $1,550.
The gold price remained steady on Monday after gold turned in its first four-week winning streak since June, while silver held above $19.00 an ounce.
Gold’s most accurate forecasters predict this gold rally, the longest rally in 90 years, has much further to go no matter what the economy does.
“Either a swift economic recovery or further dismal economic performance should bring new buyers into the market,” said Eugen Weinberg, an analyst at Commerzbank AG who was the most accurate forecaster in the first quarter of this year. Weinberg went on to say that he expects the gold price to rise as high as $1,400 next year. The $1500 December option is the most traded gold option in New York at this time.
The global sovereign debt crisis and the Fed’s attack on deflation helped the price of Gold to test key resistance levels last week.
Gold bullion prices surged 6.6 percent in August, gold’s best one-month gain since November 2009, while silver soared nearly 7 percent, its best one-month gain since November 1999. “Gold convincingly broke through a downwards sloping trendline yesterday,” said a London dealer Wednesday. “The $1250 level now remains the last technical barrier to a return to the record highs of June.”
After economists had forecast pending sales of previously owned U.S. homes would fall 1.0 percent, the index unexpectedly rose by 5.2 percent in July. U.S. jobless claims, factory orders, and same store sales data all showed some improvement.
While the better-than-expected results limited gold’s gains on Thursday, global as well as local economic concerns will continue to support safe-haven gold purchases.
Important economic reports for the coming week include the Fed’s Beige Book and Consumer Credit on Wednesday, Initial Jobless Claims and the Trade Balance on Thursday, and Wholesale Inventories on Friday.
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